This doesn’t end well

Over the past months, most quietly, the nation’s largest bank has been preparing for a housing crash. The question: could the Royal Bank withstand a 25% dive in residential real estate values across the country?

This would qualify, of course, as a ‘US-style’ tumble, the kind that brought most American investment banks to their knees, toppled others and precipitated a global financial crisis. A national real estate correction of 25% would also mean chaos and despair in certain local markets. While some, like Thunder Bay or Moncton, would see little change, others (you know where) would be leveled.

Nor would this meltdown apply evenly to all housing types. Inner city singles would survive best, while suburban McMansions would be creamed. At ground zero would be the glass-sheathed condo towers of Toronto and Vancouver.

The news is more interesting since the big banks have been working for months to dampen growing fears residential real estate values are emotional, precarious, inflated and dangerous. Mortgage debt has been exploding higher every month by 7% year-over-year, and our Big Five have a massive exposure, even though the highest-risk loans are insured for meltdown by the feds.

So what gives? It was a scant four months ago the same RBC sent out a signal that property virgins were safe to mortgage their moist little tails off. “The share of household budget needed to cover the costs of owning a home at market values generally remains close to historical norm. We thus continue to believe that the majority of local markets are, at worst, just slightly ‘unaffordable’,” the bank said. “We also anticipate that the pace of home price increases will moderate further next year amid flat housing demand. We believe that these factors will set the stage for a period of relative stability in affordability trends in Canada in the coming year.”

We now know while this was being published, the bank was conducting stress tests to see what impact there might be if a quarter of real estate equity in the country was erased. This piece of news came this week from the top – CEO Gord Nixon. He’s the latest person of influence to agree with the message of this dark, sad blog.

The good news, says Nixon, is the bank can survive such an event – even with a $2 billion exposure to the condo-development business in Toronto alone. “We feel very comfortable that we can manage through a significant downturn. But there would be an ancillary impact.”

You bet. Just as California (about the same size as Canada) did before its housing bubble blew, Canada has allowed an overly-sexed real estate market to become a huge part of our entire economy. In that jurisdiction the resultant price crash helped destroy state finances. Would this country – where an incredible 27% of GDP is now directly related to housing – have a different outcome?


MHanson Advisors

Also vexing this week is another bank CEO, which should tell you something. Bill Downe is head of BMO. He told a Toronto conference this: “There’s no question that the warning signs around the Canadian housing market have been visible for more than a year. And I think that particularly with respect to two markets, Toronto and Vancouver, investor-owned condo properties have got to be a cause for concern, just because of supply and demand.”

It only takes a few days of reading this site to figure all this out on your own. Unfiltered by editors and agendas, people from around the country share their experiences in the field. In the last few hours, for example, this from Alberta: “Today’s Canmore banner: CONDO PRICES LOWEST SINCE 2002. Still not selling. For Sale signs springing up all over town.”

And this analysis of the market crumble now going on in BC’s Okanagan, rapidly turning into the northern  Phoenix:

I did some research this morning on the OMREB ( Okanagan Mainline Real Estate Board ) site. Stats for the central Okanagan December 2011: total listings = 3856. Total sales = 183 ( giving us 21.07 months of inventory). New listings = 461. Average price year to date = down 4.43 %. Total units sold for 2011 are lower than they have been for at least 10 years……even with population growth…….21 months inventory means declining prices for a while yet ( until we reach approximately 6 months inventory ). The average selling price drop is understated and obviously skewed by the fact that volume has dropped by half. Had a buyer in our sales office on the weekend. His home was assessed in 2010 for $649,000. He sold it last week for $450,000…….yikes !

Prices are now lower than years past in Calgary and Victoria. Sales have slowed to a stop in urban areas like Brampton and Richmond. Condo owners in Kelowna and Edmonton are under water. Prices in Toronto and Vancouver have deteriorated in the past six months. Unemployment has increased in this time, and so has debt.

If you ran a bank, wouldn’t you (a) ensure you could survive what’s coming and (b) seriously try to talk the market down before it hit?

I’ll bet no bank CEO has more than 30% of their net worth in real estate. Do you?

253 comments ↓

#1 prairie gal on 01.10.12 at 6:02 pm

Dude! Why so early? Who will be first now?

Hot Amazonian date. — Garth

#2 Randy on 01.10.12 at 6:12 pm

Me >>>>?????first…

#3 Kris on 01.10.12 at 6:14 pm

Not sure I understand the point of the GDP graph. By itself, 27% GDP in RE is a number that means little to the layman (like myself). What gives it perspective is the historic or nominal 24% value. So an additional 3% GDP in RE is a danger alarm?

Yes. — Garth

#4 shane on 01.10.12 at 6:16 pm

Garth, what about Markham?

Shane

Which street? — Garth

#5 T.O. Bubble Boy on 01.10.12 at 6:22 pm

I’ll bet no bank CEO has more than 30% of their net worth in real estate. Do you?

While it is probably true that no Bank CEO has a significant *personal* exposure to real estate, several banks have continued to ‘bet the farm’ on mortgage debt… a few of these CEOs could lose their jobs over the coming correction, and that may equal far more than 30% of their net worth in the long run (if they lose a bunch of stock options and a lifetime of perks). Even a downturn in the stock price alone could kill a major chunk of a CEO’s net worth… just ask the RIM co-chairs about their net worth this year vs. last!

#6 Harry in Saskatoon, no bust here, maybe next year, or the year after on 01.10.12 at 6:42 pm

The 25% dive is hypothetical, not expected by the banks. It’s a non story. Majority of recent buyers in Edmonton and Calgary are not underwater. Nothing the market should worry about. Out west the story is how are we going to fill all the jobs. Will there be enough housing supply? No bust coming here anytime soon.

Sources, please. Or are you blowing smoke? — Garth

#7 Ben on 01.10.12 at 6:43 pm

I think a lot of real estate agents drank their own kool-aid and are sitting on a lot of real estate.

#8 gokou3 on 01.10.12 at 6:54 pm

#5,

If there’s anything that the banking crisis down south tells you, it’s that for CEO-type people, “heads you win, tails you don’t lose much / get bailed out”. Heard of cash bonus that tie to annual performances?

#9 martin9999 on 01.10.12 at 7:06 pm

you are fun to read Gartho!!

specially the ending:

”I’ll bet no bank CEO has more than 30% of their net worth in real estate. Do you?”

#10 Bill Gable on 01.10.12 at 7:09 pm

CTV Toronto – lead on Real Estate and they quoted a 25% decline “possible”.
It also used the words ‘shaky’ and if interest rates rise, “all bets are off”.
Is this is a ‘jump the shark” moment?
I have a gut feeling that a lot of people that pre bought Condos are freaking out.

This is starting to get really interesting.

The Tax assessments out in the GVRD have confused hundreds.

Some places have gone insane, some are going down.

Depends on location.

#11 Ziggy on 01.10.12 at 7:09 pm

TD’s ratio of CMHC backed high ratio loans to more traditional loans is 6:1. RBC is 1:1. How ironic is it that the bank (TD) who issued riskier loans will be protected if things go south. Borrowers are over leveraged with mortgage debt but the riskier lending conditions become for banks, the more they are protected. As a banker I would prefer borrowers to take on high ratio loans.

http://business.financialpost.com/2011/11/30/some-banks-more-exposed-than-others-to-overleveraged-consumers-moodys/

#12 Chaddywack on 01.10.12 at 7:15 pm

So does this mean that Canadian ETFs will take a hit since financials are such a large portion of the TSX?

Where did I say that? — Garth

#13 Devore on 01.10.12 at 7:21 pm

#3 Kris

When annual GDP growth of 3% is considered fantastic news not just in Canada but anywhere in the world (except China, where 3% is an unmitigated disaster), a highly leveraged and credit dependent sector like housing growing this much is not encouraging.

If another necessity of life, say food, was growing like this, with prices doubling and tripling in a decade, there would be riots on the streets. Oh wait, in places where this happened, there were.

#14 Deepoo blazin' kush on 01.10.12 at 7:22 pm

Garth,

You are awesome. This blog rocks!!

#15 Deano on 01.10.12 at 7:23 pm

Well…I don’t have more than 30% of my worth in real estate. I do in my pension though. After 40% was de-indexed last year I’m starting to wonder if that’s any safer!

#16 Hoof - Hearted on 01.10.12 at 7:24 pm

Just heard on radio.

BC Housing starts down 30% YOY
Condo starts down 40%

#17 Murray J Harris on 01.10.12 at 7:24 pm

Amigos:
Just think how much more secure our country would be, if the Banks and the Feds had of listened to our host, when he first started this blog. We have another 28% downside; because of the delay in action to douse the real estate prior.

#18 Kevin on 01.10.12 at 7:39 pm

Hi Garth
I am living in Ft McMurray and have seen a drop in housing prices over the last three years. I am not a home owner and probably won’t be one in this town for a while, if ever.
I believe that there is a definate drop in prices happening in this town despite all the talk of “We are different” just like in Vancouver and Toronto, prices are not in reach for average working people here. The average household income may be 160K but the average house price is around 480 sq/ft. Thats a Toronto and Vancouver price …well ok Burnaby !
If you think that people in Vancouver are “in denial” the people of ft mac are “closet dwellers” they are so far in denial. A small wake-up for ft mac people would be nice. On the other hand if you want to make a good investment in real estate then I think that commercial property is the way to go in this town. There is an acute shortage and with 40 bucks a sq ft for commercial property you will make some money! So if you can’t control your lust for property …check out ft mac for commercial development!
KG

#19 Junius on 01.10.12 at 7:39 pm

#6 Harry,

I was in Alberta for a period over the holidays. I heard all the rhetoric about how worker shortages were coming and how the Province was going to boom this year. I also heard the same stuff last year when I was there. Again, for most people it is B.S.

Maybe you get some building booms in small oil towns but this won’t be enough to impact most people in most communities. As Garth asked, where is the evidence of this? Note a comment from a local newspaper, business person or politician is not evidence.

Where is the demand coming from?

#20 Junius on 01.10.12 at 7:44 pm

Fascinating and disturbing piece on Oil. Of course, Goldman Sachs is right in the middle of pushing oil prices up. If this commentator is correct world oil prices could crash this year. So much for the “coming boom” in Alberta if that happens.

Here it is:

http://www.nakedcapitalism.com/2012/01/chris-cook-naked-oil.html

#21 Nostradamus Le Mad Vlad on 01.10.12 at 7:46 pm


“. . . the nation’s largest bank has been preparing for a housing crash.” — As far as I can recall, that is the first time you have ever used the words ‘housing crash’ in the same sentence (correct me if I’m wrong), in reference to Canada. So there is something wrong?

“If you ran a bank, wouldn’t you (a) ensure you could survive what’s coming and (b) seriously try to talk the market down before it hit?” — One doesn’t have to run anything, just take care of ourselves first, and when that is adequately done, assist others who are not clear reasoners / thinkers as most here are.

A lot of us know what is coming, and it ain’t a singular thing. It’s a combination of events, all happening when least expected, which is why we should be able to help if needed.

I can see where Bob’s yer uncle (last night) may be correct about the TFSA, even ‘tho Harper pledged to double the amount to $10K if he was given a majority (he was, and he hasn’t thus remaining a chronic liar).

After taking the quiz you gave us a few months ago, our RE represents approx. 31% of our net worth, so we’re not in bad shape.
*
2:45 clip Hyperinflation and dollar collapse, but not at the same time; 15 min. clip America’s in great shape! So say the banxters; China rejects sanctions on Iranian oil. Is that the sound of war drums in the background? Eighty Per Cent of homeowners ineligible; Corporate Personhood Get rid of it; EU Embargo They will only hurt themselves and citizens by boycotting Iran’s oil; Iran – Venezuela If NATO – US – UN enters Iran, WW3 happens first; Oil Plan Find something better; Preparing for the difficult years almost here; Gordon Gekko, a.k.a. Mitt Romney Sayonara, Bwana Gekko!
*
7.3 ‘quake Close to Toba? 2:59 clip Radiation fallout over NAmerica and Europe; Persian Gulf “As the aircraft carrier the USS John Stennis retreated in the face of Iranian naval exercises, the Iranian chief of staff gloated:”; 15:12 clip NDAA greater threat to US citizens than Iran (from a military person); Snipers DC is really clamping down on protestors at the G8 and G20 summits; Dictatorship See headline and understand; Sunlight prevents cancer Research proves it; Climate Change, like soulmates and soultwins, doesn’t exist; Teachers Society has reached a new low with this; Rights Going, going . . .; Fracking Halt Docs. urge it.

#22 GTA Girl on 01.10.12 at 7:47 pm

That loud *Thud* you hear, is everyone jumping off the band wagon.

Have you noticed last week’s Homes sections in TO Star and Globe were noticeably understated? Articles were few, ads less.

If the numbers come out that Toronto’s condos are still selling it will confirm something fishy is swimming.

There’s a large condo project in northern Oakville I’m watching. I heard the developer has put all his eggs in that baskets or a big payout. Absolutely ludicrous prices for units in a murky field in a bad section of town beside the 401. All glass, of course.

I’ve seen no recent ads for it, despite developer being a Bild Chair. Interesting.

So the property that houses Toronto’s The Real Jerk restaurants being sold for condo development. What a shame. More condos, less retail, less business’s …where are all these residents going to eat? Besides The Daily Bread Food Bank….or is that becoming condos too?

Stupid urban planners and their developer owners.

They need a lesson, Garth.

#23 Booyaaa on 01.10.12 at 7:48 pm

Great Garth as always, I enjoyed the REIT post too. Looking forward to the future post on preferreds, bonds and other financial vehicles to keep liquid. Hope you were not teasing! Patiently waiting!!!

#24 VICTORIA TEA PARTY on 01.10.12 at 7:49 pm

BLACK SWANS, ROOSTING CHICKENS..WHATEVER.

Garth’s following comment says it all about Canada’s economic future, vis-a-vis real estate, going out for the next decade, anyway.

“…If you ran a bank, wouldn’t you (a) ensure you could survive what’s coming and (b) seriously try to talk the market down before it hit?

I’ll bet no bank CEO has more than 30% of their net worth in real estate. Do you?”

I think most bankers are ALSO wondering about the BS
“recovery” going on in the US. That is where the jobs numbers of December, while up, hide the fact that most of the new hires are for the traditional “McJobs” and not the “real” jobs that would replace, for instance, the thousands of former Wall Street banking jobs that disappeared before last Christmas, as just one example.

Maybe some of our banksters are also looking over at the Punch and Judy Show that passes for deep economic/political discourses in the brothels, er I mean, banks/ECB offices of that now-shabby little continent.

Or, how about China and its disintegrating trade picture? Well, how about it? I dunno!

So many “interesting” economic “playgrounds” and so few places to invest one’s money for legitimate profit and so few “good” job prospects for our young, especially. Isn’t that nice.

Back to Canada, and while we kvetch about our bank shares’ future valuations, let’s look at the other shoe that’s about to drop in these parts, a shoe that Mr. Garth may regard in tomorrow’s post perhaps:

IMPENDING GOVERNMENT AUSTERITY MEASURES

Next month, Mr. Flaherty will regale us with his new four-more-years of government rectitude, following too many years of annual 8% spending increases that were made only to keep his minority governments from being chewed up by the zombies of the NDP and so on.

Mr. Harper now has a significant majority, boys and girls. Translated into plain English, if you’re on the federal payroll, those squirrel recipes may have a little more credence. Whether a staffer or a crown corp-type, the feds now reserve the right to pound down on you folks for the next three budgets then let some sun shine in on the fourth.

Here, in BC, the government is flirting with electoral disaster next year so, while cuts would be the only prudent thing to do, some zombie-feeding alternatives will likely be the order of the day.

Nevermind that recent real estate buyers here in Victoria, and over in the Big Smoke, won’t notice the austerity being that they’re about to get financially hammered all the way into the next time zone.

PERFECT STORM

Plunging real estate values; stock markets scaring away the retail investment trade; pending government austerity.

A perfect Canadian-made storm of economic deprivation at our doorstep.

How many of us are REALLY prepared?

#25 Junius on 01.10.12 at 7:50 pm

#3 Kris,

The Wealth Effect is the combined impact of rising asset values and the spin-off of economic good times. People see the values of their homes going up so they spend more money which in turn drives economic activity. The problem is that the effect is driven primarily by asset price inflation and not productivity gains. Eventually as the asset prices top out and correct they send the economy backwards into correction, sometimes with greater force.

The point is that the Canadian economy was inflated by the housing market because of the cheap credit offered to home buyers. If wages and productivity had grown at the same time then the prices increases would have been sustainable. However the contraction of credit will cause the market to fall and hurt the overall economy that has become reliant on the spending it produced.

#26 GTA Girl on 01.10.12 at 7:52 pm

What’s the difference between God and a Toronto Condo Developer?

God never claimed to be a Developer.

#27 coastal on 01.10.12 at 7:54 pm

Great interview on CFAX. Good to hear Murray has come around, a year ago he was a real pumper. You obviously schooled him well. Amazing you didn’t have the TC newspaper columnists or local agents giving you obscene phone calls.

I looked at the MLS for the first time in a few months and just can’t believe the same moldy crap built in the 70’s to 80’s selling in the $700,000 range that hasn’t been updated. It’s the same crap for sale from 3 months ago with no serious price decreases. We won’t even get into the crap built in the 50’s and earlier with the makeovers hiding all the asbestos. I think there’s a lot of Tim Tebowism happening in this town.

#28 Junius on 01.10.12 at 7:54 pm

Garth,

I think the article in Toronto Life has brought a new set of greaterfools to your site. I notice in the past few days a repeat of all the usual suspect lines from “it is different here” to “immigration saves all” to every usual bromidic response to a possible crash.

You hit some new nerves!

#29 Helpful Advise on 01.10.12 at 8:07 pm

FIRST!

#30 Onemorething on 01.10.12 at 8:08 pm

Rule #1 – When the government begins alluding to a housing problem it’s alread to late. The correction is underway. That was a year ago!
Rule #2 – When the banks start saying the same it’s just around the corner! Coming soon to a ballooned neighbourhood near you!

Remember, high ratio – insured mortgages are not what the bank is worried about. Their insured by our tax dollars! What worries them is the next rung down of 15%+ down non insured, those with only 30% down in those bubbly locals who have used RE as an ATM. But don forget their gifted boomer clients who will be pulling money out of their institutions to help sons/daughters and themselves live.

It’s not the exposure on the surface to RE that Garth mentions above, it’s the knock on effect it has on future lending and loss of capital that they cant leverage 1000x.

As for top bank exec’s, they lie to themselves everyday in the mirror that everything is going to be okay. Their assets are usually significant even if they are on the number 2-3-4 wife!

The top non-banking exec’s, government players and global elite yes are out of their major RE holding!

#31 LJ on 01.10.12 at 8:09 pm

Mmmmmm. Please provide more “chartporn.”

Although, in a couple of years, the one above (and others) might look more like a snuff film….

#32 a prairie dawg on 01.10.12 at 8:09 pm

With current valuations, my house is approximately 20% of my net worth.

Total outstanding debt is just under 5% of net worth.

Bring it!

#33 Onemorething on 01.10.12 at 8:10 pm

Oh yeah…onemorething, Gary Shilling has posted some great advice on investment theme’s for 2012. I have stuck with Gary for years. I have done well.

http://www.investmentpostcards.com/2012/01/10/gary-shilling%E2%80%99s-investment-themes-for-2012/

#34 shane on 01.10.12 at 8:10 pm

Garth, All streets!!!

Shane

#35 ts harpoon on 01.10.12 at 8:14 pm

Garth,

Regarding this blog: I always encourage the students who are on field placement in our office to read your daily work. I am surprised how they stay with it and openly discuss the issues (when time permits) during their work terms. I guess I am doing my part with exposing them to an informal “personal finance” course. Thank you!

#36 poco on 01.10.12 at 8:25 pm

sorry if i missed this if it had been posted before but Dorothy made this blog today …..check it out Dorothy–unfortunately they weren’t very nice to you

http://vreaa.wordpress.com/

i’ve noticed other comments from posters on Greater Fool being quoted on the above blog– Mclovin and Form Man for two

#37 Ballingsford on 01.10.12 at 8:27 pm

This year 2012 is starting to get interesting. It might be one for the history books! Garth should be mentioned in the books for predicting this outcome much earlier than the Banks, Real Estate conglomerates, the News Media, Bank of Canada, the Finance Minister, Economists from a number of Organizations, etc.!

You rock Garth! You’ve been preaching the gospel for quite some time now and your revelations have come true. They have no where else to hide or fudge the numbers. I wish I could high five you right now!!!

#38 TheFirstRick on 01.10.12 at 8:32 pm

From last blog entry;

#79 betamax on 01.10.12 at 3:23 am.

#48 TheFirstDick — thanks for the irrelevant response from the realtor handbook.

===========

You are SOOOOOOO wrong dude. If you followed my posts from day one I was anything but a fan of Realtors. As a matter of fact, I can *prove* to you I was the one who FIRST used the word Realturd online.

Google it, every blog entry using the word at about 2008 can be traced back to me.

Beta, you are one of the sheep. This blog has become a bastion of group think filled with people bragging about their millions, 25yr olds making 90K a year with $400K in the bank. People bragging about their ‘better’ options in Florida regardless of the facts.

What type of BS do you an your minion buddies here agree with? The kind that suits your position? This blog has completely lost its way, Garths message has slowly morphed into something less likely to be refuted simply by narrowing the predictions to suit narrow examples.

But since Garth has become quite the censor, I suspect this post is unlikely to make the airwaves, but someone calling me a ‘dick’ does simply because it comes from a minion man.

See what I mean sheeple? You’ve become lame brained idiots and this has absolutely nothing to do with Garth’s message.

Group think on the internet sucks.

Look in the mirror, angry guy, for the one who has lost their way. — Garth

#39 TurnerNation on 01.10.12 at 8:32 pm

Will the Harper Regime kill the TFSA (Turner Free Savings Account)?

Ther perfect revenge.

#40 Darryl on 01.10.12 at 8:33 pm

“I’ll bet no bank CEO has more than 30% of their net worth in real estate. Do you?”

That’s because they would have to own a whole city .

#41 Darryl on 01.10.12 at 8:43 pm

No bank CEO would because they would have to buy a whole city to be over 30%

#42 chubster on 01.10.12 at 8:44 pm

state budgets, CA and elsewhere, are also busted from the obscene bloatfest in public sector entitlement spend. we are in the first innings of the big showdown. there will be many more chris christies. not sure how canada fares in this regard.

#43 T.O. Bubble Boy on 01.10.12 at 8:47 pm

Speaking of bankers and RE, don’t forget that (as noted here a few days ago) Sherry Cooper from BMO is selling her $3M home… If even a Big 5 bank’s top economist and serial RE pumper is selling, who is buying???

#44 Victor on 01.10.12 at 8:48 pm

Depth of cuts will depend on degree of service, Flaherty warns

Tuesday, Jan. 10, 2012

Some federal departments could face cuts of more than 10 per cent in the upcoming federal budget, Finance Minister Jim Flaherty says.

He also says his government is taking a close look at the cost of public-sector pensions as part of its overall review of government spending.

The Conservative government is in the final stages of a year-long process that aims to find at least $4-billion a year in permanent savings from the roughly $80-billion a year that Ottawa spends on direct programs.

http://www.theglobeandmail.com/news/politics/depth-of-cuts-will-depend-on-degree-of-service-flaherty-warns/article2297624/

=====

This will not end well for the public sector.

#45 Fool in the GTA on 01.10.12 at 8:48 pm

The banks hold construction loans to condo developers, no? And my understanding is that construction loans are short maturities. Won’t this be a big hit to the banks? And there is no CMHC guarantees on this type of loans right?

I remember a big Euro bank loan to a mini mall developer in the US. The loan was written down 80%. I could see something similar occur for all these condo developer loans.

#46 NewWorldPartyDotOrg on 01.10.12 at 8:53 pm

Read:

Housing, the most manipulated market in the world
http://www.newworldparty.org/2011/04/housing-most-manipulated-market-in.html
(Canada’s manipulation is explained in bottom half of article)

“TD Bank told me that for a couple of years, Canadian banks were giving out zero-down, 40 year mortgages to people who were one paycheque away from insolvency. These were Canada’s version of subprime mortgages. These seemed like a conundrum on the surface. Canadian banks are very conservative and risk-averse. Why would they give out so much money to such risky borrowers? I asked TD this question. TD explained that they were not taking any risk. Canadians are, through CMHC, which is owned by the government. CMHC insures these risky mortgages. If the borrower defaults, taxpayers would be on the hook. The banks do not take the risk, but get the reward. CMHC is Canada’s version of Fannie Mae and Freddie Mac. MacLean’s magazine now says the same thing in their article called “The CMHC: Canada’s mortgage monster”.”

#47 Ballingsford on 01.10.12 at 9:01 pm

#38 TheFirstRick
See what I mean sheeple? You’ve become lame brained idiots and this has absolutely nothing to do with Garth’s message.

Group think on the internet sucks.

Look in the mirror, angry guy, for the one who has lost their way. — Garth
****************

First Rick, sounds to me like your are a Realtor. Well, the good times are over. You have my sympathies, but you don’t have my sympathies for being part of the problem that contributed to the housing bubble. Bidding wars, blah, blah, blah…!

May your shingles last a lifetime, may your furnace and air conditioner never run out, may your condo fees money pool have enough to pay for renovations (especially the glass tower window maintenance which will cost a fortune), mold, rot, never run out, etc.

The day of reckoning has begun!

I’m glad at the moment I’m a Renter. It works perfectly fine for me for the time being! Roof leaks, not my problem, toilet runs, not my problem, taps drip, not my problem, grass cut, not my problem, walkways shoveled, not my problem, wife is cranky, that’s my problem.

Cripes, what a crazy year this is going to be!!!

#48 Victor on 01.10.12 at 9:10 pm

For starters, don’t conflate an overheated condo market with the REIT market. Though the heads of Royal Bank of Canada and Bank of Montreal are now warning about a bubble in Vancouver’s and Toronto’s condo markets, these don’t directly relate to REITs. There are apartment REITs, sure, but these rely on rental income, while their peers focus on commercial and industrial buildings.

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/why-reits-could-and-should-keep-booming/article2297601/

===========

As Garth has said many many times over, smarter to buy income-generating REITs than over-priced condos. Great article from today’s Globe.

#49 Canadian Watchdog on 01.10.12 at 9:21 pm

“The good news, says Nixon, is the bank can survive such an event – even with a $2 billion exposure to the condo-development business in Toronto alone”

$2 billion? Try $42 billion across the entire housing market and with a Tier 1 of 13%, a 15% housing correction will wipe out RBC.

http://i44.tinypic.com/ekfclk.png

#50 tkid on 01.10.12 at 9:24 pm

http://www.theglobeandmail.com/news/opinions/cartoon/editorial-cartoons-january-2012/article2287771/

The Globe and Mail cartoonist must’ve gone to one of Garth’s speaking engagements …

#51 Kaganovich on 01.10.12 at 9:40 pm

Prepare for deflation across the board dawgies…in assets as well as the price of necessities…but especially in incomes. Try to shed some debt if you can. Things are not nearly as rosy as the msm has been pointing out lately, not in global employment figures or in sustainable resource demand from emerging economies. Remember the distinction Steve Keen always makes between wants and demand. Demand is constituted by one’s income combined with credit available to them. Of course everybody wants a meal and a tank full of gas in their vehicle (not to mention a sub zero fridge and a holiday to Bora Bora), but can their ability to demand such things make it happen? Looking bleaker by the day with regards to this question. The streets will be alive this year, you can bet on that.

#52 Kalergie on 01.10.12 at 9:42 pm

Picking up what #12 said. Wouldn’t an ETF tracking the Canadian economy take a hit if there is a RE correction? If not, what other asset class will?

ETFs own companies. They do not track economies. This is a tenuous connection. — Garth

#53 TheFirstRick on 01.10.12 at 9:42 pm

#47 Ballingsford on 01.10.12 at 9:01 pm

First Rick, sounds to me like your are a Realtor. Well, the good times are over. You have my sympathies, but you don’t have my sympathies for being part of the problem that contributed to the housing bubble. Bidding wars, blah, blah, blah…!

++++++++

Yeah, Squidly77 and I are Realtors!!!! BAWHAWHAHAHA!!!! Dumbest comment on here in 4 1/2 yrs.

You need to have a look back in the archives before you make a fool out of yourself, Ballingsford.

Getting my ‘group think’ thingy yet? Naw, I doubt it.

#54 Jsan on 01.10.12 at 9:47 pm

It sounds like the bankers are now like everyone else covering their arses. I heard Ozzie Jurock on Money Talks on the weekend, he went on about how you do not get the true story or interpretation of the story from the media. His example was where the media recently reported that Vancouver real estate sales were down BUT that prices were up in December 2011 vs December 2010. He than went on to say that this information was meaningless and that the real story should be that prices in Vancouver have dropped a whopping (his word)141,00 lower or 17% from May 2011 where the average price was 834,000 to December 2011 where the average price is now 691,000.

He said in the US a drop like this would be the front page headline of every newspaper yet in Canada it didn’t even make the news. What the heck?? Is he like the bankers starting to cover his arse??

#55 Arrow to the Knee on 01.10.12 at 9:59 pm

I used to think Garth was blowin’ smoke…then I took an arrow to the knee.

#56 vatodeth on 01.10.12 at 10:09 pm

Budget could see some departments cut by more than 10%: Jim Flaherty

http://news.nationalpost.com/2012/01/10/budget-could-see-some-departments-cut-by-more-than-10-jim-flaherty/

#57 Raj on 01.10.12 at 10:11 pm

This dude is predicting 50% decline for Toronto

“When an asset bubble bursts, prices often return to where the rapid, price runup began, he said. “Look at what your real estate was worth between 1996 and 2000. That is the range it will fall to … I think housing in Vancouver and Victoria could decline 60 or 70 per cent, while Toronto is more like 50 per cent, and Montreal a little less.”

http://www.theglobeandmail.com/globe-investor/investment-ideas/features/2012-market-outlook/get-set-for-a-crash-forecaster-says/article2298020/

#58 Oil Manager on 01.10.12 at 10:14 pm

#6 – I work for a major oil company and I received 165 applicants (in one week) to one entry level engineering position. There are plenty of workers, just not the key (experienced) people.

#59 Stupesing in Cabbagetown on 01.10.12 at 10:19 pm

#22 GTA Girl – Oh no, not The Real Jerk! Where will I get a decent shrimp roti!? What a shame.

I live near that area. Lots of vacant storefronts. Other than condo building there is little economic activity apparent.

#60 brad in saskatoon on 01.10.12 at 10:21 pm

so whats your take on say saskatoon , inner sitting houses say 2 and 3 bedroom rental houses , rents are around 850 too 1150 per month and prices now are from 105,000k too 165,000 i cannot see them takeing too much of a hit .?
thanks

#61 poco on 01.10.12 at 10:21 pm

Arrow to the Knee on 01.10.12 at 9:59 pm
I used to think Garth was blowin’ smoke…then I took an arrow to the knee.

i hope that archer gets a little more accurate

#62 Crazy on 01.10.12 at 10:23 pm

Garth,

Some good news:

Housing starts rise thanks to Ontario, Atlantic Canada

http://www.thestar.com/business/article/1113156–housing-starts-rise-thanks-to-ontario-atlantic-canada?bn=1

#63 Unistar38 on 01.10.12 at 10:26 pm

Everybody is trapped. Too late to get out.

#64 Canadian Watchdog on 01.10.12 at 10:26 pm

#45 Fool in the GTA

You are correct http://i41.tinypic.com/j7qjjm.png

#65 AgAu on 01.10.12 at 10:28 pm

Garth,

I agree with the notion, but with millions in salary and stock options, every bank CEO will likely have less than 30% of their assets in RE.

I agree with the point though, if they are warning about mortgages why are they giving them out?
See below.

http://www.theglobeandmail.com/report-on-business/economy/housing/bank-chiefs-sound-alarm-over-housing-market/article2297346/

While I do not always agree with all your comments, I find the information you present in this blog is essential (for me at least) to keep things and events in perspective in these uncertain times – thanks again.

AgAu

#66 City Slicker on 01.10.12 at 10:28 pm

#6 Harry in Saskatoon, no bust here, maybe next year, or the year after on 01.10.12 at 6:42 pm

The 25% dive is hypothetical, not expected by the banks. It’s a non story. Majority of recent buyers in Edmonton and Calgary are not underwater. Nothing the market should worry about. Out west the story is how are we going to fill all the jobs. Will there be enough housing supply? No bust coming here anytime soon.

Sources, please. Or are you blowing smoke? — Garth
———————————————————
I have a buddy who does mortgage brokering and says in Calgary 40% of those who bought in the last few years are under water.

Garth it’s been an up hill battle but now it’s all you buddy. Take it to them!

#67 Uh Oh Canada on 01.10.12 at 10:32 pm

The housing bubble is costing us jobs! Just driving through our commercial sector and noticed many once occupied buildings for rent- on both sides is the street. These are the sign of the times! Our high mortgage debt means high wages are needed to service them. People cannot afford to work for less here. Since the housing crash in the US, housing is cheaper. We all know that everything is cheaper in the US- and now labour will be too. No wonder big companies like Merck, and others are moving South!

#68 Cave Girl on 01.10.12 at 10:34 pm

Garth, could you comment on the housing market in Quebec? Do you see any correction happening here?

#69 City Slicker on 01.10.12 at 10:39 pm

19 Junius on 01.10.12 at 7:39 pm

#6 Harry,

I was in Alberta for a period over the holidays. I heard all the rhetoric about how worker shortages were coming and how the Province was going to boom this year. I also heard the same stuff last year when I was there. Again, for most people it is B.S.

Maybe you get some building booms in small oil towns but this won’t be enough to impact most people in most communities. As Garth asked, where is the evidence of this? Note a comment from a local newspaper, business person or politician is not evidence.

Where is the demand coming from?
———————————————————
I think the jobs you hear of are labor jobs in the field. Those that nobody wants cause of the rigors and seclusion. And those out there are running scared.

#70 Jon B on 01.10.12 at 10:41 pm

The higher echelon of the Big Evil Five banks likely have far less than 30% of their net worth in real estate due to the size of their overall finanical wealth. Morally these folks are bankrupt. Call me a hater anyday. I’m not stupid and I know who’s getting rich as a result of all that mortgage debt out there.

#71 Unistar38 on 01.10.12 at 10:41 pm

If Bank CEOs say it is over, then it must be over. Because they see first hand that RE loan demand has stalled, thus the fuel to the price rocket has run out.

That’s it, folks. The unprecedented RE run in Canada has finished!

Time to face the consequences, Canadians.

#72 Puzni on 01.10.12 at 10:56 pm

According to this article the housing market is in upswing in vancouver :
http://www.vancouversun.com/business/Housing+starts+upswing+CMHC/5975528/story.html

No it doesn’t. It details more condo speculation. — Garth

#73 JSS on 01.10.12 at 10:57 pm

Garth – are shares in the big 5 Canadian banks in trouble?

No. — Garth

#74 BPOE on 01.10.12 at 10:57 pm

Sounds like some bank CEO’s are regretting not buying BPOE and trying to “shake the tree”. Good luck with that. Iron fist on the tiller as Vancouver sails onward and upward

#75 Seven Stars and Orion on 01.10.12 at 11:01 pm

I could use a finger point in the direction of some information. Which of the big five has the least exposure to potential Real Estate losses? I get that TD has a high ratio of fed backed mortgage products but I’m having trouble finding this data. Help anyone? Thanks.

#76 DUI on Money Road on 01.10.12 at 11:02 pm

#44 Victor on 01.10.12 at 8:48 pm
+++++++++++++++++++++++
There’s a government wide hiring freeze in full effect right now. Hasn’t hit the newspapers yet.

Peace!

#77 DUI on Money Road on 01.10.12 at 11:04 pm

#71 Unistar38 on 01.10.12 at 10:41 pm
++++++++++++++++++++++++++
If you go back to the blog in January of ’10 and ’09, you’ll see similar discussions taking place. It’s likely things will pick up in a few months and again we’ll all be shaking our heads at the craziness out there.

#78 JedEye on 01.10.12 at 11:06 pm

Where’s the link to the Canmore Banner article? Or did you just make that up?

But of course. — Garth

#79 Unistar38 on 01.10.12 at 11:15 pm

#77 DUI on Money Road,

One reason for the prolonging this run was that the interest rate was brought down to close zero due to the financial crisis in the US.

As Garth said, we may have had the possibility to an orderly wind down three years ago. Now it is an impossibility. What the last three years achieved was to trap every, any, and all the potential greater fool!
oh, Boy…

#80 Brad in Van on 01.10.12 at 11:23 pm

Damn it sounds like The American was spot on with this. A couple months ago he said our government was well aware of a crash coming and that we were conducting stress tests. I’ll keep my gut check feeling and trust that he knows exactly what he is talking about. He hasn’t been wrong yet, and he even called the currencies to fall against the US dollar, which is not easy task. He may work for the government because he understands there is much ore at play than what many of us recognize. If we are preparing for a 25% correction across the country on average then I would venture to say he knows exactly what he is saying about Vancouver crashing 40%. Like I said already…. He hasn’t been wrong about anything and he gives real numbers that equate to something real – not just generalities.

#81 Westernman on 01.10.12 at 11:25 pm

Uh Oh Canada,
Maybe you aren’t aware of this but labour has always been less expensive ( and more productive ) in the U.S. than in Canada. Always been that way and it isn’t about to change.

#82 45north on 01.10.12 at 11:27 pm

Over the past months, most quietly, the nation’s largest bank has been preparing for a housing crash.

I figured it (the bank) would be quietly auditing its mortgages – each mortgage properly registered with the municipality, t’s crossed and i’s dotted. No robo signing, no MERS. Securitized mortgages all properly documented, no zombie servicing companies. Case law in place.

Question: what about Saskatchewan? The answer depends on the loan-to-value. I remember seeing the figures and they didn’t look that different than the rest of the country.

Talking about a 25% drop in real estate, half of the good people I know are going to caught with a mortgage worth more than their house. They are still good people.

#83 Westernman on 01.10.12 at 11:42 pm

45 North @ # 82,
Question: What about Saskatchewan?
Answer: Who cares?
And secondly, what does the fact ( or fiction ) that they are ” good people ” have to do with anything?

#84 Frank on 01.10.12 at 11:42 pm

I read the article and it does not sound that bad. Canada is a growing country and I cannot see a major downturn, unless interest rates go up and that does not appear to be happening anytime soon. What I do see is a lot of people that have become slaves to a mortgage.

#85 Mr Buyer on 01.10.12 at 11:43 pm

#77 DUI on Money Road…If you go back to the blog in January of ’10 and ’09, you’ll see similar discussions taking place. It’s likely things will pick up in a few months and again we’ll all be shaking our heads at the craziness out there.
…………………
Just to clarify, Bank CEOs stated the tenuous state of affairs in ’10 and ’09 ? All stats were the same at those times as well? So it is just another slow January. Nice one.

#86 Smoking Man on 01.10.12 at 11:46 pm

Nice try Garth

One Trillion is all it would cost to bail out every mortgage holder in Canada. Bet the USA wishes they went down that road.

RBC is shitting it pants not cause of mortgages. It’s called counter party risk.

They have taken down exposure to EURO sovrven debt, the thing is they don’t know what exposure their counter parties in the bond market have.

That’s the killer…….

Don’t want to shit on your party dude.

So oh they are shaking in their boots about mortgages

#87 AlanC on 01.10.12 at 11:46 pm

Hi All,
What portion of the housing debt is actually held by the banks? I though that the bulk of the loans were securitised and onsold to investers? The banks themselves just took a fee and continue to take fees to service the loans.
Or have I got this wrong!
Regards AlanC

#88 Unistar38 on 01.10.12 at 11:49 pm

#72 Puzni on 01.10.12 at 10:56 pm

This is the lagging indicator in terms of real estate. These houses were presold many months ago. And these condo owners are now trapped. It is these proud condo owners who worry the most, because they probably have realized that they bought them at the exact peak prices!

#89 Waterloo Resident on 01.10.12 at 11:52 pm

Most REIT ETFs are invested in Apartment or Commercial properties (like malls, offices), so a housing crash won’t affect them in such a large way. Yes, if the overall economy falls then REITs so fall, but there are no ‘HOUSING’ REITs that I know of. The big risk is investing in house construction companies, THOSE are the areas of the stock market that are going to get killed when homes fall in price and people avoid buying houses.

Meanwhile, while homes fall, people will want to move into apartments, and apartment REITs will most likely keep going up.

But my personal view on things is that our housing bubble in Toronto will continue for another 15 years, it won’t be slowing down anytime soon. Next month we will be getting a prime RATE CUT , and watch that put fire under our housng market !!!

#90 Smoking Man on 01.10.12 at 11:52 pm

anyone catch Ron Paul tonight on every major USA main street media.

Talk about a microphone to a national audience. whether he wins or not….He has woken a pissed of population what have and like guns. Military grunts love him too

Like your heading

This doesn’t end well

#91 Aussie Roy on 01.10.12 at 11:53 pm

Junius on 01.10.12 at 12:53 pm

#106 Aussie Roy,

Excellent post and articles. The similarities between Australia and Canada are just so interesting to watch. In particular, the twists and turns of the RE Industry including out right lying in order to prop up a deflating bubble.

I appreciate it.

Glad you find the articles of interest it is very interesting to watch the Canadian experience seems to me you are just a few months behind the Aussie house price melt.

#92 AprilNewwest on 01.11.12 at 12:02 am

Brad #80 – I agree with you.

#93 dd on 01.11.12 at 12:07 am

“The good news, says Nixon, is the bank can survive such an event – even with a $2 billion exposure to the condo-development business in Toronto alone”

Sure. Just like the stress test in the US and Euroland. I think Dexia was solvent right up to the point that it went bankrupt.

#94 Not 1st on 01.11.12 at 12:07 am

Just closed on sale on my cowtown house. Went to the lawyers office today to sign it off. he couldn’t help but ask me why we are selling. I simply told him that I think prices in calgary have peaked and a serious retrenchment (not crash) is coming and that we will buy back in about 12-18 months.

His response was a deep belly laugh and then some mumbo jumbo about the price of oil and lots of jobs etc. Denial is everywhere, especially given that calgary prices have already come off 10% in the last little while, why isn’t another 10% possible.

#95 Aussie Roy on 01.11.12 at 12:08 am

Aussie Update

I wonder whether many of the big bank CEO’s will take their money and run before the s*&t hits the fan like 2 long term bank CEO’s did here in Australia. No-one wants to be the CEO of a bank when a “Minsky moment” arrives.

It’s amazing how little it takes to get some people in propertyland very excited.

Not long after RP Data-Rismark released its November property price data the industry was buzzing with “news” that the much-anticipated recovery for the residential real estate sector had finally started.

What was this exciting news?,

A 0.1 per cent rise in dwelling values in a single month. That’s it.

http://theage.domain.com.au/real-estate-news/blogs/domain-investor-centre-blog/counting-eggs-before-they-hatch-20120110-1pt5n.html

Australia’s housing bubble is finally ending: Steve Keen

Steve Keen

Mortgage debt is by far the largest component of debt in Australia today—government debt, which is the focus of political debate, is trivial by comparison (a quick caveat though—finance sector debt may be larger again than mortgage debt, if this claim, sourced from Morgan Stanley, is accurate— since it shows Australia’s aggregate private debt ratio as almost equal to the USA’s).

http://www.propertyobserver.com.au/residential/australia-s-housing-bubble-is-finally-ending-steve-keen/2012011052985

Mafia fills Italian banking needs

Organised crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country’s biggest “bank” and squeezing the life out of thousands of small firms, according to a report.

Extortionate lending by criminal groups had become a “national emergency”, said the report by anti-crime group SOS Impresa, released overnight.

http://www.theage.com.au/business/world-business/crisis-turns-mafia-into-italys-no1-bank-20120111-1pu9e.html#ixzz1j7R00aDm

Soros – it’s deflation.

Global economy is in a worse crisis than in 2008

“We are in a more dangerous situation than in 2008,” said George Soros, Chairman of prominent hedge fund Soros Fund Management, here on Monday, referring to the ongoing crisis in the eurozone. “We now face the prospect of a deflationary vicious circle, which is going to affect the real economy, the morning after a 25-year long party of leveraging,” said Mr. Soros

http://m.thehindu.com/business/Economy/article2789649.ece/?maneref=http%3A%2F%2Fwww.google.com.au%2Fm%2Fsearch%3Ftbm%3Dnws%26safe%3Doff%26gl%3Dgb%26sky%3Dmrdr%26client%3Dms-android-samsung%26source%3Dlnms%26q%3D%2522housing%2Bbubble%2522%26tbs%3Dqdr%3Ad%2

Past BULL gets all bearish

There’s no painless way of popping a bubble, but sometimes it just has to be done.

One of the easiest ways to start an argument in Australia is to mention the H word: housing.

Prices are going to crash, prices are going to rise, it’s way too unaffordable, it must be affordable because people are buying it, our banks are too exposed to housing, part of our banks’ strength is the solid nature of the Australian housing market, we are seriously under-built, we’re about to have excess houses as the boomers sell out, negative gearing is an evil that’s perverted the market, negative gearing keeps up the supply of rental accommodation, local and state governments are grossly incompetent in bowing to NIMBY pressure groups, local and state governments are all in the developers’ pockets and are allowing too much high rise – and so on.

http://au.pfinance.yahoo.com/our-experts/michael-pascoe/article/-/12536266/the-real-housing-affordability-policy-causing-angst/

Please just don’t buy in 2012

The Australian property market ended 2011 on the ground in a foetal position after a serious assault by Harsh Reality.

Symptoms include:

• A year’s supply of unsold houses on the market
• Low and falling building applications
• Low and falling finance approvals
• Failing auctions nationwide
• First home buyer indifference
• Universal consumer deleveraging

This year will see a major downward re-pricing of Australian real estate. Further, the rate at which it is falling will accelerate.

http://www.prosper.org.au/2012/01/10/a-new-year%e2%80%99s-resolution-don%e2%80%99t-buy-now/

#96 Mr Buyer on 01.11.12 at 12:14 am

I have to say in all honesty I am not at all happy we have reached this expected yet potentially devastating juncture with respect to RE and the larger economy. I have three kids to raise and it looks like I will not have the means to do so in a manner coming anywhere close to that which I enjoyed growing up. I will endure a great deal of crap but I can not simply stand by and allow my children to needlessly endure deprivation in Canada (one of the richest countries on earth). There was this brand new pin ball machine set up in a local arcade when I was a kid. It was really cool and the kids poured quarters into it for all of about two days but then it was left abandoned in the hottest spot in the whole arcade. As it turns out the machine wasn’t set up properly and was tilted and also easily tilted as a result. Even the kids knew a slanted game when they saw one. Call me sentimental but we can say all we want about people gorging on debt but when it is the only game in town what else were they supposed to do? Of course people can chose not to buy but if we were to follow that logic then that means that for the masses to be faultless there would have been no house sales for the past several years. I know a rigged game when I see one and pandering rationalizations when I hear them. Business is not the most effective way to develop and implement technologies, run a country, or provide for the needs of a population. We must wake up. Those among us that understand approaching wider perils and think they can individually cope with the potential catastrophe ahead have not really formed an accurate assessment of the potential risks lying ahead in my humble opinion. Sure I can probably buy my house much cheaper in a few years now that the dance has started but there is going to be many hard looks and much soul searching as a result of this mess. Hard work, community and country are tried and true methods to develop strength and provide for our future generations. A few key laws could change everything.

#97 Fleabitten Monkey on 01.11.12 at 12:15 am

#20 Junius

I was also in Alberta this holiday season and heard the same thing, but more of a mini-boom for a few years and no large appreciation in real estate. Still I saw up around Edmonton just outside St. Albert an massive project for a new Walmart and more urban sprawl. Immediately though of how many families it would take to buy and fill up this community. It seems developer never seem to stop betting on oils draw.

#98 dd on 01.11.12 at 12:15 am

“I’ll bet no bank CEO has more than 30% of their net worth in real estate. Do you?”

Then I would really question having a profolio of related assets such as – house, REITS, and preferred shares in banks.

PS, just heard Carny is keeping interest rate on hold until 2013. Strike one with your 2012 predictions.

#99 InvestorsFriend (Shawn Allen) on 01.11.12 at 12:20 am

REAL ESTATE is 27% oF GDP? REALLY?

Okay, I won’t dispute that real estate construction and financing and marketing and related is a big part of what our economy produces.

And I won’t dispute that the real estate industry is getting bigger or that house prices are likely to drop.

But I am not convinced it could be 27%…

Here is a link to the componets of Canada’s GDP. See first graph at link here.

http://www.investorsfriend.com/Canadian%20GDP%20Canadian%20imports%20and%20exports.htm

It shows that construction is only about 6% of GDP.

Any attempt to track real estate as percent of GDP would need to include assumptions. Like how much of forestry goes to real estate.

I bet they impute the value of your house to GDP even if you are not paying a mortgage. That’s like when someone imputes a value for housework…

I dunno, if construction is only 6% of GDP then its hard to get to 27% even if you include rent as part of GDP and you try to figure what part of banking relates to real estate…

Overall I don’t think I would accept this graph from MHanson Advisors at face value.

Then again, I was taught in grade one that the three necessities of life were food, clothing and shelter. So if a certain economy devoted 27% of its efforts to shelter, would that be such a bad thing?

I think today’s economy has evolved to the point where food, clothing and shelter certainly do not compose 100% of GDP and things like entertainment and communication compose a huge chunk of GDP.

Bottom line. No it ain’t 27% but yes house prices are at risk.

btw Garth, I never did figure out which prick I sound like.

#100 InvestorsFriend (Shawn Allen) on 01.11.12 at 12:23 am

Actually, never mind, the top bar on the chart I linked to includes real estate. Oops…

I take back what I said maybe it is 27%

#101 Engineered on 01.11.12 at 12:28 am

So, Oil Manager:

What’s the going rate for a reliability and maintenance engineer, or metallurgist, P.Eng, with 15 years’ experience, 5 years as a supervisor? I’m pretty comfortable where I am, but might consider moving if there’s enough ‘green’.

#102 nonplused on 01.11.12 at 12:38 am

I have more than 30% in real estate now. 37% to be exact. But I thought at 43 that was ok?

Oh well it looks like it’s going to go to 27% all on it’s own. I knew that when I bought it though, but my wife really wanted the house.

#103 Victor on 01.11.12 at 12:39 am

But it is the rampant acceleration in condo demand and construction that has been at play since 2010 that have elevated the risks of a correction in that segment ahead of others.

“The interesting thing is what’s happening below the surface, the gap that is opening between the two,” he said.

This latest warning came as the chief executives of both Royal Bank of Canada and Bank of Montreal sounded off about the surging condo market while attending a banking conference in Toronto.

William Downe, CEO of BMO, said there were “warning signs” emerging in the two hottest condo markets, Toronto and Vancouver.

“With respect to two markets — Toronto and Vancouver — investor-owned condo properties have got to be a cause for concern, just because of supply and demand,” Mr. Downe said Tuesday at the conference. “I wouldn’t give up on the Canadian housing market, but there has to be a soft landing.”

Gordon Nixon, chief executive of RBC, added there was “no question” condo markets are vulnerable.

“When you look at markets like Vancouver and Toronto, there’s a level of caution from a risk perspective which is higher today than it would have been a few years ago,” Mr. Nixon said.

http://business.financialpost.com/2012/01/10/highlights-from-a-strong-december-for-housing-starts/

#104 Canadian Watchdog on 01.11.12 at 12:42 am

Just post it Garth…. This is not about fame.

You’re right. It’s also about respect. Try again. — Garth

#105 disciple on 01.11.12 at 12:44 am

RioCann REIT is overbought, its price is on the high side, it’s mostly invested in large suburban retail space, and I believe would take a hit if consumer spending fell due to housing price declines. But I could be wrong. Perhaps we could compare what happened with US retail REITS from 2008-2009?

#106 Morry on 01.11.12 at 12:57 am

Caution yes… but it’s not the end of the world as we know it:
‘Mr. Nixon said RBC has conducted stress tests on its books for a decline in housing prices of as much as 25 per cent. Though the bank doesn’t figure the situation will become that dire, it is comfortable its lending operations could withstand such a large hit if one were to occur, particularly in the Vancouver and Toronto condominium markets. The bank’s exposure to the Canadian condo development market is about $2-billion, Mr. Nixon said.”

And a 25% drop is and would be healthy. cycles. all good! (as long as you are within your budget)

#107 Kevin on 01.11.12 at 12:59 am

#60 brad in saskatoon on 01.10.12 at 10:21 pm

“so whats your take on say saskatoon , inner sitting houses say 2 and 3 bedroom rental houses , rents are around 850 too 1150 per month and prices now are from 105,000k too 165,000 i cannot see them takeing too much of a hit .?
thanks”

Put it to you this way for Saskatoon.
House price gains have outstripped rent increases.
Rents have outstripped wage increases.

Here is how it looks.
Average house price from Jan 2006 to Sept 2011 increased by 111%
Average rent price from 2006 to 2011 increased by about 65%. ( Final numbers for 2011 are not in yet, but this is close)
Average weekly wage from Jan 2006 to Sept 2011 increased by 27%.

Here is how the average weekly wage and the average house price in Saskatoon compare from Jan 2006 to Sept 2011. http://tinyurl.com/7lhf69p

This graph measures the growth in house prices and personal disposable incomes.
http://tinyurl.com/6s7q9db

Yup, it’s a bubble.

#108 sam on 01.11.12 at 1:13 am

Hi Garth; Can you recommend a few stocks for me to short during this real estate correction? Someone posted home depot as a potentially good stock to short a few weeks back. Your opinion is greatly appreciated>

#109 Junius on 01.11.12 at 1:14 am

I’m loading up on oil stocks and gold these days, waiting for the big boom to lift my stocks to the moon.

Vancouver may crash due to Chinese language issues, but the sushi is great.

I’m betting the farm.

#110 Andrea on 01.11.12 at 1:29 am

Dear Garth and interested followers,

Is there a way or a tool to assess one’s total financial situation that you can recommend to me? I have a stable job as a teacher, a good pension as far as pensions go, and a 3 year old home in a community that I feel safe in. The home backs onto 8 hectares of protected forest that I enjoy walking in and it is also within a 10 min. drive from both my husband’s job and mine. I don’t want to panic and just “sell” without knowing exactly what my financial picture is for the future and understanding clearly what you mean or how one assesses a proper level of liquid assets. I’m obviously a fledgling and have a lot to learn. I would really like to take stock beyond our kitchen tally of daily expenses we have always kept.

Yours sincerely,
Anna

#111 ab on 01.11.12 at 1:32 am

ab here.

Remember my post a couple articles back about the offer on my property? Listed for $525? Counter offer at $470? I countered at $510 (you had mentioned around $500). Just got a counter at $487. I like the conditions, deposits, etc.. We’re getting closer. Who votes for me to accept it? Who votes for me to make a final counter? And if so, at what? lol. I need to get this in by noon tomorrow. I’m the rural wife on the island who had to convince hubby for 2 years to sell. Thanks everyone, and especially you, Garth, for this terrible, pathetic, pornographic blog. Hahha.

#112 Lorne on 01.11.12 at 1:54 am

….and the foreign money and speculation continues in Vancouver!

http://www.theprovince.com/news/Speculation+fever+spreads+Granville+Street+real+estate/5976131/story.html

#113 mattymatt12345 on 01.11.12 at 2:37 am

i have been a believer from day 1… common scene!

#114 Puzni on 01.11.12 at 2:48 am

Big Banks are sounding a warning about condos:

http://ca.news.yahoo.com/overbuilt-condo-markets-vancouver-toronto-risk-says-rbc-175002380.html

#115 Crazy on 01.11.12 at 3:38 am

Garth,

I have a question: Who is it you are referring to when you sometimes mention “the orange guy’s shorts”?

Just womdering.

#116 Mark on 01.11.12 at 3:39 am

Not only would RBC survive a RE collapse, but they would actually thrive, as the mortgages they hold, mostly CMHC-insured, would be repaid at 100 cents on the dollar by the CMHC if any of them went into default. And with a credit contraction to RE, the spread they could earn with loans would increase dramatically.

“#6 – I work for a major oil company and I received 165 applicants (in one week) to one entry level engineering position. There are plenty of workers, just not the key (experienced) people.”

No surprise there. The oil and gas people are about to learn the same lessons that Electrical/Computer Engineers have been suffering for the past decade because of the Nortel debacle.

#117 GtaGuy on 01.11.12 at 3:52 am

just a bit off topic but anyhoo

Surprised to see this column in the spectator.

http://www.thespec.com/opinion/columns/article/652363–harper-is-wrong-in-demonizing-iran

Just a wee bit critical of Harper’s blindly supporting US aggression worldwide.

#118 NoName on 01.11.12 at 4:10 am

#84 Frank on 01.10.12 at 11:42 pm

What about wage deflation, is that kind of like inflation? Interest rate can stay low but if disposable income is stagnant or is shrinking will fill like inflation, perhaps worse.
just for the rcord
(i got no raise in last 3yrs, also, cola taken 3yrs ago)
but its not that bad as it sounds…

#119 D on 01.11.12 at 4:17 am

Glad I sold my house in Edmonton last year. We moved to Ontario and are renting in the outer GTA.

People think I am mad when I tell them I will rent until house prices come down.

Well, I have 150k in the bank, and have just spent the last several days shifting my modest RSP holdings into US equity, REIT, and corporate bond ETF’s.

Resisted the urge to buy a shiny new SUV on credit, instead bought a slightly used 2011 model economy car recently and paid cash. Minimal credit card debt….
We are ready.

Not bad for an uneducated guy like me.

I felt at times like I was the only one who saw what was coming. Thanks Garth for reaffirming for me daily that I wasn’t crazy.

PS- Edmonton Journal reports Edmonchuck housing starts were down %6 in 2011, as well as a drop in tax assessed values.

#120 NoName on 01.11.12 at 4:45 am

dont know what to think about this…

“Real Estate agents often bake a log of cookie dough to make houses smell great when they’re trying to sell. Take advantage of your oven and make your kitchen smell wonderful by baking apple cores, banana peels, or other fruit discards at a low temperature… ”

http://lifehacker.com/5872290/make-a-free-kitchen-air-freshener-with-fruit-peelscores

it’s like double tree, they give kids cookie every time they pass by reception.

#121 futureexpatriate on 01.11.12 at 5:08 am

I did until it crashed down 50%…

Now, about that pic… where DO you find them????!?!?!?

That expression on the kid’s face is PRICELESS. She knows what’s coming. Strangely enough, the artist didn’t capture the depth of anger.

#122 Canuck Abroad on 01.11.12 at 5:10 am

Just curious Garth – if all the condo “owners” flood the rental market with their units, and this results in an oversupply of rental units and consequently a fall in rents GTA-wide, will this impact returns that your could earn on REITs with GTA residential portfolios?

If so, and one is concerned that residential REITs could be in trouble (but obviously not to the same extent as buying a GTA condo) would it be better to focus on commercial REITs? Any opinion?

No impact. — Garth

#123 futureexpatriate on 01.11.12 at 5:10 am

I know it would have been probably impossible given his “training” in caricature and the essence of it is exaggeration, but would it have killed him to draw her beautiful? Probably would have saved him a kick in the nuts.

#124 Michelle on 01.11.12 at 5:15 am

“Garth, what about Markham?” – Shane

“Which street?” — Garth

Garth, you make me chuckle… you’re such a smart-ass!
I’ll bet Stephen Harper didn’t have a sense of humour :)

#125 BC Boy on 01.11.12 at 5:36 am

Don’t get GOD involved in this pathetic blog!

#126 Canuck Abroad on 01.11.12 at 6:14 am

36 / poco – amusing website. From today’s entry…
“Spot The Speculators #71 – “I loaned a family member $20K three years ago to help them with a liquidity issue while they were closing on their house. I asked why they didn’t borrow against their Yaletown condo but the response was that they had already borrowed against it for their place at Whistler…”

Gotta love Whistler! I’m a former Whistler owner and love the place but just couldn’t justify owning anymore when I had no time to visit, so sold about 5 years ago. My opinion is Whistler properties are trophy properties only. You buy for bragging rights. I don’t think there is a single unit in town that generates a positive yield (unless bought maybe 20 years ago). Anyone tells you otherwise, they are lying. Units in Whistler are down by at least 33-40% in price from the peak. When prices started falling several years ago, it was (I think) because a lot of American owners bailed because they needed the cash, and the strengthening Canadian dollar made their mortgages, strata fees, etc more expensive.

However, Vancouver owners flush with “equity” on their Vancouver homes picked up some of the slack and bought heavily. Will be interesting to see what happens if Vancouver owners decide they need to sell thier Whistler homes because they can’t tap the Vancouver-house-ATM anymore.

Hard to imaging prices could fall much more than they already have but who knows? Anyone local or Vancouver area who has more insight, I would love to know.

#127 Canuck Abroad on 01.11.12 at 6:33 am

One final Whistler point – check out the down payments required by the banks now. They have been seriously burned by owners who bought what they couldn’t afford. Coming soon to a town near you?

http://www.whistlerrealestate.ca/whistler-real-estate-information/finance-taxation.aspx

#128 Devore on 01.11.12 at 7:39 am

#91 Aussie Roy

Glad you find the articles of interest it is very interesting to watch the Canadian experience seems to me you are just a few months behind the Aussie house price melt.

I dare say 6 months. The spring market seems to set the pace for the rest of the year. Last year the mortgage changes, although really inconsequential for first time buyers (reduced affordability by 3% or something like that) have caused something of a panicked stampede of buying. That pulled us through the spring market, and we’ve muddled through the rest of the year. This year, the sentiments are even more negative, and even the MSM isn’t pulling any punches. A gently nudge may no longer be enough.

#129 DUI on Money Road on 01.11.12 at 8:32 am

#110 ab on 01.11.12 at 1:32 am
—————————————–
Counter at $500k and accept 495k.

#130 T.O. Bubble Boy on 01.11.12 at 8:36 am

Somehow, I don’t think that Bond Auctions will impact these lending rates in Italy:
Organized Crime Now ‘Italy’s No.1 Bank’

#131 bigrider on 01.11.12 at 8:39 am

In case anyone missed this.

Buy stocks.

http://www.bnn.ca/News/2011/12/30/Early-phase-of-a-bull-market-Carrigan.aspx

#132 DUI on Money Road on 01.11.12 at 8:40 am

#85 Mr Buyer on 01.10.12 at 11:43 pm
——————————————-
One bank doing a common stress test and another complaining about Toronto and Vancouver is hardly CEOs complaining about the tenuous state of affairs.

#133 The Dividend Yield Investor on 01.11.12 at 8:46 am

While it is probably true that no Bank CEO has a significant *personal* exposure to real estate, several banks have continued to ‘bet the farm’ on mortgage debt… a few of these CEOs could lose their jobs 5 T.O. Bubble Boy on 01.10.12 at 6:22 pm

Let’s hope so for the sake of your fellow Canadian’s that the CEO gets canned.

If this was anything like the States, the CEO would be receiving a substantial raise, a huge bonus during the worst portion of the economic downturn and a “ticker tape” parade, straight down the main street of Toronto, for how he will personally save the Canadian system.

The Dividend Yield Investor
Atlanta, G.A.

#134 Victor on 01.11.12 at 8:58 am

Toronto Hydro gets rid of hundreds of contract staff following OEB ruling

January 11, 2012

Toronto Hydro has axed contractors employing between 700 and 1,000 workers after receiving a stinging rebuke from the Ontario Energy Board.

And the company says that hundreds of permanent staffers – as much as 20 per cent of its workforce of 1,700 – will be told soon that their jobs, too, will disappear.

The dramatic cuts come after the energy board signaled that it won’t give Toronto Hydro anything close to the $500 million a year in extra revenue it says it needs for each of the next three years to mend its aging system.

http://www.thestar.com/business/article/1113711–toronto-hydro-gets-rid-of-hundreds-of-contract-staff-following-oeb-ruling?bn=1

=========

Is it observer’s bias or am I sensing a large increase in ‘layoff’ stories as of late?

#135 The Dividend Yield Investor on 01.11.12 at 9:00 am

#25 Junius on 01.10.12 at 7:50 pm

The same song (asset inflation), different dance (now Canada vs USA).

You nailed it!!!

The Dividend Yield Investor
Atlanta G.A.

#136 househornyhousewife on 01.11.12 at 9:06 am

Garth,

This CEO announcement should not be much of a surprise to anyone. Those guys have probably known about this situation as long as you have but they simply did not want to cause a panic and get the ball rolling even faster. Now they don’t have a choice because debt has gotten so out of control that they are trying to mitigate any future carnage. At this point, it’s like trying to stop a speeding train with your bare hands though so I think it is too little too late.

I’m not too worried about the banks’ financial situation. They are not stupid … unethical and selfish in their lending practices perhaps, but not stupid. They are no strangers to the CYA technique (CYA being “Cover Your Ass”).

What worries me now is that after the bubble has burst and real estate values have stabilized once again, Canadians will swing the pendulum too far to the other side and begin to avoid debt like the plague. This is already happening in the US and it is hurting their economy. Debt is like alcohol. A little bit makes life a tad more enjoyable but too much can be toxic. Many of these overextended Canadians will eventually hit a wall and HAVE to stop spending (making a hangover look like a walk in the park). This will bring our economy to a screeching halt. This is what concerns me the most. What do you think about this ?

HHHW

#137 pbrasseur on 01.11.12 at 9:07 am

Hi Garth, all

You may want to bookmark this one

http://www.centris.ca/en/residential-stats

Those are the MLS real-estate stats for the province of Quebec (you can also select a region or a city). Still showing up to the 3rd quarter but I imagine the 4th should come out soon.

One thing is cristal clear, listings are growing much faster than sales in all segments with condo listing exploding.

As a matter of fact Quebec’s economy seems to be in a freefall with 71,000 jobs lost in the past six month, this is huge. Outlook is quite negative and this could be just the beginning. This has consequence since Quebec counts for more than 20% of the Canadian economy.

Yikes you say?

I will be on CJAD in Montreal Wednesday at 10 am. — Garth

#138 a prairie dawg on 01.11.12 at 9:15 am

#114 Crazy

The ‘orange guy’s shorts’ is a euphemism for an ING Direct savings account.

#139 sisco on 01.11.12 at 9:18 am

Garth,

How do you feel about Halifax?

One could argue that Halifax is the largest RA market on the east coast, but some are saying that any dip/dive/collapse of property values will be offset by the influx of money from the recent ship building contract.

Fact or fiction?

Thanks!

It is a relatively stable market, but will be affected by any national correction. The ships are cool, but the NS economy is declining. No net effect. — Garth

#140 Bob Copeland on 01.11.12 at 9:19 am

The American hangover continues. Will it have any effect on Canada?

http://www.huffingtonpost.com/bruce-judson/the-foreclosure-crisis-a-_b_1193179.html

#141 Mike on 01.11.12 at 10:27 am

#6 Harry – I bet ya $ this is Harry of SRAR. One of the biggest, if not biggest cheerleader of Sask RE, possibly only second to CMHC.

#18 – Kevin – Fort McMurray is slightly different. 1) The household income there is astronomical 2) The big employers (Suncor, CNRL, Syncrude) will pay it’s employees’ downpayments (and then some) for a new $800k house and 3) Land there is extremely limited yet demand is still skyrocketing. You know how Timberlea just got completely developed and filled up? Well, where do you think they’re going to build next? Don’t know? That’s correct. Because there is NO MORE land being released. If RE anywhere in Canada is still doing to go up, it’ll be there. Also, RE prices have not gone down there. They did, but they are about level now w/ the peak in 2008, maybe slightly higher.

#142 Devil's Advocate on 01.11.12 at 10:31 am

”It only takes a few days of reading this site to figure all this out on your own. Unfiltered by editors and agendas, people from around the country share their experiences in the field.” – Garth

LOL, do you really think so? Are you quite sure? “Unfiltered by editors and agendas”? Really? Do you seriously believe that this “pathetic” blog is representative of the typical Canadian mindset on real estate? Seriously?

”The question: could the Royal Bank withstand a 25% dive in residential real estate values across the country?”

“A national real estate correction of 25% would also mean chaos and despair in certain local markets” – Garth

Are you kidding? Such a “national” real estate correction would not affect just “certain” markets.

But seriously, bring it on! Things are getting boorrrrriinnngggg. I love the smell of a good sale in the morning.

Those who would be most seriously affected would be the greater fools who rushed in to beat rising prices in a “sellers market”. How stupid was that! You know what they say “a fool and his money are soon parted”.

This is little more than a redistribution of wealth as painful as it is and will be for some rest assured there are others who are raking it in big time.

We all know that if you took all the wealth and divided it up evenly amongst everyone in a very short time there-after it would soon be back to the same uneven distribution it was before. Let’s face it, such would be right as they who were given what they did not deserve or earn never end up keeping it.

Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. Want to give something away… give education. An education is a bargain at any price and the best lessons are learned at one’s own expense.

It’s the free market. Gotta love the free market. I trust and have faith in the free market. And what exactly is the “free market”? Well mostly it is Greater Fools and their herd mentality. And what is the herd doing now?

Love it… really don’t ya just love that free market smell? And there ain’t a thing anyone can do about it, not army nor soldier. Push and it pushes back harder.

#110ab on 01.11.12 at 1:32 am
ab here.

Remember my post a couple articles back about the offer on my property? Listed for $525? Counter offer at $470? I countered at $510 (you had mentioned around $500). Just got a counter at $487. I like the conditions, deposits, etc.. We’re getting closer. Who votes for me to accept it? Who votes for me to make a final counter? And if so, at what? lol. I need to get this in by noon tomorrow. I’m the rural wife on the island who had to convince hubby for 2 years to sell. Thanks everyone, and especially you, Garth, for this terrible, pathetic, pornographic blog. Hahha.

Don’t be so insecure in your own judgement. If it is that close that you are asking the advice of others whether to accept it or not it is close enough to accept. Do it! Also, doing so at this point the buyer will be less inclined to renegotiate terms based on some relatively minor thing that comes up through the course of their due diligence as they go about satisfying their conditions with a home inspection etc., or at least allow you in such event to stand firm. If you squeeze them too hard they might walk and if not certainly they will be vigilant of every little unanticipated expense, as there almost always are, that comes to light before they remove their final conditions. Tell your REALTOR® to take back their last offer accepted by you with the warning “No games”.

Three days ago you quit this blog. — Garth

#143 Devil's Advocate on 01.11.12 at 10:45 am

“And what is the herd doing now?” – D.A.

Nothing. Neither buyers nor sellers are doing anything nor have they for the past three and four years. Boooorrrring.

“Nothing happens until something moves” Albert Einstein. Let’s move something! Prices? Ya that’ll work. Tumbling prices would crush my overextended competition while at the same time creating huge opportunities for me. Let’s do it!!!

#144 brad in saskatoon on 01.11.12 at 10:52 am

#107Kevin on 01.11.12 at 12:59 am

can you use averages to determine (more lower income houseing )
cause i can see by the charts that ya it is in a bubble no doubt , but what about the 500,000 and up houses that bring the averages way up .
the way i see it is the upper market will get hit , the middle market will get tanked , the low market will be least affected as the middle class will not be moveing into the rougher parts of town to hang there shingle in the slums , there will always be a demand for rentals in the inner city for low income property so the rents should hold or maybe slightly go down but not a huge drop in rents as it is mainly welfare paying these rents anyways and all the other bills.
the houses might see a slight drop in prices but the monthly rents(dividends ) will still be there every month , so like we have heard before , no sense turning a paper loss into a real loss.

#145 Aussie Roy on 01.11.12 at 10:56 am

Aussie Update

The property spruikers are at it again talking up the Aussie residential real estate market contrary to objective and factual market information.

Recently the Adelaide property market was booming and now the Brisbane market is predicted to grow by 10% in 2012. We always appreciate well researched analysis and well informed commentary. We enjoy reading articles that demonstrate objectivity and provide factual information. Articles that give the reader a true sense of what is occuring in the market place, so you can make well informed decisions.

However when we read articles that are subjective, false, misleading and deceptive our blood pressure rises. How do you know what to believe? How can you discern what information is accurate and reliable? You might believe that conducting your own research and due diligence is the way to go? But let’s face it most people are time poor and are not able to find all the information they need.

Between 2007 and 2011 we have been monitoring media reporting on the Australian property market, and have a pretty good feel for who is reporting accurately. Some analysts might be a little bullish or might be a little bearish, but they report accurate, reliable, and factual information. There will always be a little bit of bias towards one point of view or another, and that’s okay. Other analysts might be highly bullish or highly bearish and they report inaccurate, unreliable, subjective, highly biased and at times false information. This is not okay.

http://www.australian-real-estate.net.au/investing/2011/12/20/australian-property-spuikers-whos-who-of-2011-named/

A debate is raging as to whether Australia’s housing market is a bubble about to burst. The debate, which has split the property industry, has been triggered by price falls in most capital cities. The falls have raised the question – is this the start of something bigger?

Some say the market is up to 40 per cent too high and could plummet if the Reserve Bank of Australia hikes rates steeply or the commodities boom ends. Others say the market is fairly valued and China and population growth have created unprecedented prosperity, meaning another leg-up in prices looms.

To Lawrence Roberts, a US-based real estate blogger, investor and author of The Great Housing Bubble, such a debate is nothing new. He was one of the few who predicted the housing crash in the US, which has seen house price declines of 30 per cent. Prices there are still falling. “The parallels between the debates in Australia and the debates here in the United States are remarkable,” he says. “Everyone here in the US was in denial because so many people were benefiting from the run-up in prices that nobody wanted to see the truth.”

http://www.charteredaccountants.com.au/News-Media/Charter/Charter-articles/Economy/2011-09-Property-Faces-Silent-Crash.aspx

#146 eaglebay - Parksville on 01.11.12 at 10:57 am

#24 VICTORIA TEA PARTY on 01.10.12 at 7:49 pm

Usual doom and gloom coming from you.
Do you have one once of optimism? What a sour puss party guy.
You can say what you want but maybe you could give us some facts and the basis for your “predictions”.
What a fun guy (fungi) you are.
Go to work and do your share for Canada.

#147 Junius on 01.11.12 at 10:59 am

#109 Junius,

Sigh. This is an imposter. Don’t load up gold or especially oil stocks. Reads like BPOE wrote it.

Is Vancouver now “the Most Desperate Place on Earth?”.

#148 Randy on 01.11.12 at 10:59 am

How much will oil and fuel prices have to increase before we see a dramatic impact on rural and recreational property values ? They still look seriously over-priced to me….

#149 Devil's Advocate on 01.11.12 at 11:01 am

“Three days ago you quit this blog.” — Garth

And at the time said “I will return”.

I have resigned myself to the fact I am addicted. This “pathetic” blog satisfies something within me. I will leave the psychoanalysis of that sick aspect of my personality to the Pups and Poodles to chew on.

But if you would prefer that I left for good just ask or succumb to the wishes of your pups and poodles and banish me ;-)

Wait a minute… would that not be contrary to your claim in this very day’s blogpost that this “pathetic” blog is “unfiltered by editors and agendas”?

Your blog… your call

You have never been edited or filtered – except when deserving. ;-) — Garth

#150 Randy on 01.11.12 at 11:12 am

If the Federal Government has an unfunded Defined benefit Pension Plan liability of over $228 Billion or about one-half of the National Debt…..Can you imagine what a mess the rest of the country is really in ??? Should we just double all the known debt amounts to get to the real numbers ???

#151 poco on 01.11.12 at 11:15 am

#180Morry on 01.11.12 at 12:49 am –from last post
oh you silly puppys. Invest i nthe PoCo area before it’s too late.
http://www.thenownews.com/news/Cities+property+values+still+rise/5943733/story.html
we are happy we bought at a fair _low_ price. After ten years of NOT paying rent my son will be way ahead in terms of LOST rent…even if his PRICES remain flat, which will not be come selling tim in ten years. prices are not falling in the poco area
____________________________________________

sorry bud-like i said you are dead wrong on that– PoCo and the surrounding area have been falling longer than Kelowna–
when you posted that property values were not falling in the PoCo area, it was obvious to see that you’re just another troll trying to pump up a deflating asset–you haven’t a clue about property values and what’s been happenning in any market–
i don’t believe your story about your TH purchase because nothing in that type of property has gained 20% in the last year anywhere in the tri cities area–more like a potential 20% decrease
and if you believe any properties potential value is a result of a property assessment from last year, you are on top of my list as the greatest fool

Van Guy–you were right –he is BSing us –can’t prove his statement about his so called purchase

#152 Blacksheep on 01.11.12 at 11:35 am

#111, ab

DO NOT COUNTER, take the 487k. and RUN.
Risk the loss of sale for a 13k. gain?

IF your lucky?

Bird in the hand.

take care
Blacksheep

#153 harden on 01.11.12 at 11:36 am

#112 Lorne

interesting wording in the story you link to about the listings on Granville Street here in Vancouver:

“Seven lots are being ‘sold’ for $3.6 million each, while a larger one is going for $4.1 million.”

hmm. no one’s actually ‘sold’ anything yet…

#154 Realtors in a Panic on 01.11.12 at 11:40 am

Realtors on this blog are in a panic of the housing crash. In. Brampton like Garth said has stopped as nothing is selling. Word is the RE BOARD in brampton will stop releasing the monthly numbers for fear more people will catch on We are in a housing crash. Why else would realtors post daY and night on this blog…..crash

#155 sam.i.am on 01.11.12 at 11:42 am

Caught the radio show…Garth delivered a message consistent with his blog writings. The callers needed real help. Guess not everyone reads this blog.

#156 eaglebay - Parksville on 01.11.12 at 11:42 am

#129 DUI on Money Road on 01.11.12 at 8:32 am
#110 ab on 01.11.12 at 1:32 am
—————————————–
Counter at $500k and accept 495k.
——————-
Not worth taking a chance for a few thousand dollars.
Accept at $487k and be glad you’re out of it.

#157 Pr on 01.11.12 at 11:42 am

Who ever as to do something to stop for this crazy mania of real estate, should do it now, its only going up straight to the sky of high debt. The landing, if theirs one, is going to be crazy! The people, government, Carney, falarthey may be you, please some one stop that. Their is no way this market will sustain higher interest rate. My guess is every 1% hike in interest rate, will lead to 5% losing their home.

#158 eaglebay - Parksville on 01.11.12 at 11:45 am

#130 T.O. Bubble Boy on 01.11.12 at 8:36 am
Somehow, I don’t think that Bond Auctions will impact these lending rates in Italy:
Organized Crime Now ‘Italy’s No.1 Bank’
————–
This is great. Put the criminals in jail and there won’t be any loans to be repaid.
Wish we could do the same.

#159 Devil's Advocate on 01.11.12 at 11:47 am

”You have never been edited or filtered – except when deserving. ;-)” — Garth

And I thank you for that and apologize for that one time of indiscretion. ;-)

But seriously Garth, admit it, you and all the pups and poodles missed me during my three day absence didn’t you? ;-) Were it not for Westernman and me this blog would lack that which all good epic stories must have – a villain to loath as marker to one’s own weaknesses.

I will, from time to time, frequent this “pathetic” blog as it does most certainly satisfy something within me, I think correctly alluded to by another’s earlier post some days back.

But it is, believe it or not, busy for those who make work and I must attend to that first. Also it is my work which spawns that controversial subject matter I will from time to time post here upon which the pups and poodles may gnaw.

With a Nic-Nac-Paddy-Wack give a dog a bone…

#160 eaglebay - Parksville on 01.11.12 at 11:52 am

#136 househornyhousewife on 01.11.12 at 9:06 am
“What worries me now is that after the bubble has burst and real estate values have stabilized once again, Canadians will swing the pendulum too far to the other side and begin to avoid debt like the plague. This is already happening in the US and it is hurting their economy.”
———-
Avoiding debt. Where would the money go?
Savings, investments maybe?
How’s this hurting the economy?

#161 Form Man on 01.11.12 at 11:52 am

#143 DA

now that even DA is capitulating, you know things are bad in Kelowna…………

#162 Kevin on 01.11.12 at 11:56 am

#144 brad in saskatoon on 01.11.12 at 10:52 am

“there will always be a demand for rentals in the inner city for low income property so the rents should hold or maybe slightly go down but not a huge drop in rents as it is mainly welfare paying these rents anyways and all the other bills.
the houses might see a slight drop in prices but the monthly rents(dividends ) will still be there every month , so like we have heard before , no sense turning a paper loss into a real loss.”

People who bought these homes after 2007, probably can not cash flow positive these homes. Most “investors” do not account for property taxes, insurance, maintenance costs for every month which lead up to over $500 bucks a month, never mind the mortgage payment of about $900 bucks month. Most “investors” who bought these homes were looking at appreciation not buy and hold. Stories in the local rag, helped promote this as they called the inner city “undervalued.” Ha! I have read the “undervalued” and “catch up effect” from around the world countless times.

Welfare does not even cover the cost of rent never mind food and other living costs. Rents are way too high in the inner city and when the correction comes to this city, some of these “investors” could be in for a surprise.

“What? Real estate does not always go up?”

#163 jess on 01.11.12 at 11:56 am

Reframing /Rebranding Real Estate

Redefined Condo project reborn as rentals to provide ‘workforce housing’

http://www.spokesman.com/stories/2012/jan/03/condo-project-reborn-as-rentals/

Redevelopments tangled ownerships gone bad
http://www.spokesman.com/stories/2011/jun/19/icon-in-distress/

http://www.spokesman.com/stories/2011/jun/19/icon-in-distress/

#164 eaglebay - Parksville on 01.11.12 at 11:57 am

#137 pbrasseur on 01.11.12 at 9:07 am

What’s happening with the infrastructure super project in Northern Quebec?
This project could employ 100,000 people directly and indirectly to develop and build.
Plus, hydro electricity, mining and much more.

#165 Timing is Everything on 01.11.12 at 12:03 pm

Go west young man (woman)…

‘Prairie Provinces at the head of the pack in 2012’

http://tinyurl.com/4uexvn6

You can invest in a resource-based prairie economy without having to live there. — Garth

#166 Okanagan Renter on 01.11.12 at 12:06 pm

#149 Devil’s Advocate on 01.11.12 at 11:01 am
“Three days ago you quit this blog.” — Garth

And at the time said “I will return”.

I have resigned myself to the fact I am addicted. This “pathetic” blog satisfies something within me. I will leave the psychoanalysis of that sick aspect of my personality to the Pups and Poodles to chew on.

DA, don’t leave s’il vous plaît. You’re the only realtor here who has enough intelligence to raise the collective IQ of your profession above the level of protoplasm (I’m being too generous to your colleagues, I know). As for being addicted to this blog, I know that only too well.

#167 Okanagan Renter on 01.11.12 at 12:09 pm

#162 Form Man on 01.11.12 at 11:52 am
#143 DA

now that even DA is capitulating, you know things are bad in Kelowna…………

Kelowna is a RE blackhole, sucking all the light of hopes and dreams of homeowners and, for the time being, sideliners waiting to vultch.

It reminds of the famous standoff between Captain Kirk and the Romulans in the original Star Trek (trek nerd alert). Someone has to give in eventually. Guess who it’ll be?

#168 DonDWest on 01.11.12 at 12:13 pm

“#139 sisco on 01.11.12 at 9:18 am
Garth,

How do you feel about Halifax?”

Avoid the south end like the plague. It reminds me of Toronto/Vancouver prices around 2005. Not as big a bubble, but a bubble none the less. I’ve seen crap 900 sq. ft. bungalows list for 400k to 500K in that area.

Halifax is tougher to live in than it at first seems because there isn’t affordable rent (due to so many students); so you’re relegated to having to buy a house or accepting the fact you’ll be a grown adult living in student like rentals/hovels. There’s no rental market for working middle class people.

The cost of everything else is also much higher (food, gas, insurance, taxes). Whatever job you have here; expect to get paid half what you would in other Canadian cities.

While the housing market is stable in Halifax, it’s largely due for a decline considering the prices have increased an average of 3% to 5% a year while economic growth has been an anemic 1-2% a year. Private sector wages are pathetically low. A correction is due, but nothing major.

The ships, offering 5000 middle class jobs, will hardly make an impact in a city metropolitan area that has a population of just under 400k. It’s a drop in the bucket.

If you want to come to Halifax to work; rather than be a student or retiree, you better get used to loving the subarban lifestyle and paying a mortgage. You may not have to do that right away, and I recommend holding off for a while and living like a college student, but eventually you’ll end up that way due to an overpriced south end, a heavily contested and crime filled north end, and an international student filled West end. Essentially, only the burbs are habitable for the working middle class. You may be able to land a gem old Victorian in downtown Dartmouth (if those kind of houses are your thing).

#169 C on 01.11.12 at 12:18 pm

MLS listings for:

-Burlington, Ontario
-$400,000 to $550,000
-2 or more bedrooms
-2 or more bathrooms
-House
-Detached

January 5th 384
6th 387
7th 392
10th 402
11th 407

Are people sensing change and starting to list? We’ll see?

#170 Devil's Advocate on 01.11.12 at 12:22 pm

#155Realtors in a Panic on 01.11.12 at 11:40 am
Why else would realtors post daY and night on this blog…..crash

Well let’s think about that…. Possibly because we aren’t stuck behind a counter at McDonalds with some manager in training watching over us? Or maybe because we worked until 12:30am putting that deal together and like everybody else deserve some downtime even if it happens to be mid-day? Or because we are taking Wednesday off instead of Sunday seeing as we are showing properties to that out of town buyer then?

But you are probably right that there are many REALTORS® who just have nothing better to do. After all in a city the size of Kelowna where there are over 800 REALTORS® and just 2000 single family homes sold in a “typical year”… well you do the math…

Real estate can be the most rewarding full time job or the least rewarding part time job… choice is yours.

#162Form Man on 01.11.12 at 11:52 am
#143 DA

now that even DA is capitulating, you know things are bad in Kelowna…………

Huh? Post again when you have awakened and can formulate and present a logical premise. Seriously Dude that was not one of your finer moments. Grab a Java.

#171 GPC on 01.11.12 at 12:25 pm

From the Edmonton Real Estate Blog:

“Affordable shouldn’t be the key criteria either…Is it best for someone right out of university with loads of student debt to buy right away because they got their first job and they can afford it”

Can somebody explain the logic in this to me? If not affordability, i.e. price to income ratio, what exactly, is the key criteria?

In the second case, no one in that situation should even be thinking of buying anything, or actually getting approved for anything (unless of course, mom, dad and the g-parents are the backers). Anyone with any sense would explain to the doe eyed little creatures that first you should pay down your student debt and then come back in a few years when you have saved a full 20% downpayment and that the mortage and carrying costs of the purchase should be no more than 3.5 x their income. Is anyone doing this?

(This realtor also said in a previous post that potential buyers should be wary of those that have a vested interest in prices going down. )

Please, can anyone help me understand this?

#172 Froggy on 01.11.12 at 12:32 pm

Article regarding major job losses in Quebec in the last months of last year:

http://www.canada.com/business/Dismal+Quebec+numbers+could+sign+worse+come+Canada/5959576/story.html

#173 Pr on 01.11.12 at 12:37 pm

People losing faith in the system, they are looking at the numbers that are coming out, being issued by governments around the world and they are wondering if they are correct. We have low rates of inflation, but you can see the price of food has gone up, the price of fuel has gone up, energy. They aren’t jiving. People are saying, ‘Someone is not telling me the truth and so I better take matters into my own hands and look out for myself because my government isn’t.’ That’s true throughout the Western world.

#174 Van guy blazin kush on 01.11.12 at 12:37 pm

Poco,

Morry can’t prove it. His son will live there for a very long time until he accepts a loss on his TH. This TH must be 20 + years old too. It’s a great place to grow weed.

Morry will soon be sorry

#175 sam.i.am on 01.11.12 at 12:46 pm

Don D did you not read the report that over 1B in dev permits were isued in the HRM last year and housing starts are at a 30 yr high? The NS min wage just went up to around $10, that must be very helpful. Surely there is a middle class working people rental housing market.

#176 Junius on 01.11.12 at 12:47 pm

#172 GPC,

Fear. And Greed.

#177 Form Man on 01.11.12 at 12:53 pm

171 DA

The published OMREB data and your panicked, frightened, responses speak for themselves. It must really hurt to be consistently wrong, but we all salute your stubborness and denial…………

#178 Timing is Everything on 01.11.12 at 1:08 pm

You can invest in a resource-based prairie economy without having to live there. — Garth

True, but I was thinking more along the line of actual jobs (work), mostly for the younger set. With more investment, more job opportunities.

#179 Kilby on 01.11.12 at 1:30 pm

#111 ab.

Take the offer! We had our house appraised (not by realtor) at $619,000. Listed at $597,000. Sold for $497,000 after 6 months. 1/2 acre in Okanagan town, lake view. There were 15 lake view homes for sale at the time (Jan. 2011) and I think most of them are still for sale, following the market down. A dollar in the hand is worth more than a house in a flat market.

#180 Arshes on 01.11.12 at 1:39 pm

#136 househornyhousewife on 01.11.12 at 9:06 am
“What worries me now is that after the bubble has burst and real estate values have stabilized once again, Canadians will swing the pendulum too far to the other side and begin to avoid debt like the plague. This is already happening in the US and it is hurting their economy.”
——————————————————-

Avoiding debt?

It’s not that they are avoiding the debt, they can no longer borrow because no one will lend it to them anymore. Its harder to borrow than it was before, and any amounts you can borrow are significantly smaller than before. Lenders aren’t wiling to lend like they did before.

Debt is not a “Ask and you shall receive” situation, lenders determine what is lent, not borrowers.

#181 Tony Right on 01.11.12 at 1:40 pm

Sad part is, the government will bail everyone out with public money and nobody will be held accountable, just like in the U.S.

#182 Kilby on 01.11.12 at 1:42 pm

Vancouver, East and West.
2,584 active residential listings today. In the last two weeks there have been 142 completed sales. Is this an appropriate sales/listing ratio?

#183 Uh Oh Canada on 01.11.12 at 1:42 pm

“Maybe you aren’t aware of this but labour has always been less expensive ( and more productive ) in the U.S. than in Canada. Always been that way and it isn’t about to change.”

———————————————————-

It’s true, however it’s gotten worse since the US dollar is at par. The big wig companies here are all selling out to the South. Companies that have been here for decades. This is within the last three years.

#184 ab on 01.11.12 at 1:49 pm

Re: “#129 DUI on Money Road on 01.11.12 at 8:32 am

#110 ab on 01.11.12 at 1:32 am
—————————————–
Counter at $500k and accept 495k.”

Thanks, a few family members are saying the same thing. I still think there’s a possible counter….

BUT…. then again, what Blacksheep says:

“#153 Blacksheep on 01.11.12 at 11:35 am

#111, ab

DO NOT COUNTER, take the 487k. and RUN.
Risk the loss of sale for a 13k. gain?

IF your lucky?

Bird in the hand.

take care
Blacksheep”

I don’t want to let go of the birdie… and hate myself for eternity….

AND… thanks to you too, PV…

“#157 eaglebay – Parksville on 01.11.12 at 11:42 am
#110 ab on 01.11.12 at 1:32 am

Not worth taking a chance for a few thousand dollars.
Accept at $487k and be glad you’re out of it.”

I’m leaning more towards accepting…
Thanks everyone

I’ll let you know!!!!

#185 Okanagan Renter on 01.11.12 at 1:57 pm

I’m very curious to see how this flipper’s shack fares on the zombie Kelowna market:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11302648&PidKey=-340530024

I saw this bung undergo a radical reno over the summer and barely was the paint dry when the For Sale sign got staked on the lawn.

But here’s the rub: not only is this joker crib ridiculously overpriced, it’s located beside what’s possibly *the* worst rental building on Pandosy. The photo shows none of that of course. I jog by there almost every day and you wouldn’t believe the amount of dope dealers and divers misfits who call the place home. Good luck getting your wife to sunbathe in the yard in full view of these miscreants.

For me, nothing represents what’s deadly wrong with Kelowna RE than this property. I wonder what DA would say about this, if anything at all.

#186 Van guy blazin kush on 01.11.12 at 2:03 pm

This one sold in May 2011 for 1.368 mil.

http://www.realtor.ca/PropertyDetails.aspx?propertyID=11240500&PidKey=-886026902

Still sitting for over 3 months as this flipper is probably going to lose $

#187 #110 ab on 01.11.12 at 1:32 am on 01.11.12 at 2:06 pm

dangerous to take advice from people you don’t know.

that being said, the sentiment seems to be either take the $487 and run, or come back again with a counteroffer.

if it were me I’d take it and run…if you’re feeling lucky you might go back with $500 or maybe $497 and try to get a few more $. $497 might help the buyer think they “won”.

all depends on whether you think there’s any other potential offers….if all you hear (and see) is crickets, I’d pocket the $487 post haste and get on with life.

good luck!

#188 Debtfree on 01.11.12 at 2:13 pm

@ 168 ok renter
The assessments don’t lie and we can all read them on line . All one needs is the address . I’ve checked out many . It’s a bloody disaster for all that I’ve viewed in the OK . Ours are up this year again but not as much as yours are down. luckily two of my four are in Smithers and they got the garth nod . Got to like that.
I’m beginning to think ” form man” is Mike Rink of” the mission hill disaster ” good name for a tune . Kill all your debt and you’ll be laughing .

#189 grantmi on 01.11.12 at 2:19 pm

#180 Kilby on 01.11.12 at 1:30 pm

We had our house appraised (not by realtor) at $619,000. Listed at $597,000. Sold for $497,000 after 6 months. 1/2 acre in Okanagan town, lake view.

Kilby.. curious!

When did you buy it and what did you pay for it. (if you can share) Are you at least ahead?? (Just trying to put it all in perspective.

#190 renting and waiting on 01.11.12 at 2:21 pm

#176 sam.i.am in response to Don D West’s halifax post…

I can’t speak to Halifax except to say that i’ve researched it for the past month with the thought of maybe moving out East and what Don says seems to be true. What I *can* tell you is that there do exist cities where there really are few if any rentals for middle class working people. I live in one such city: Kingston.

What happens is that the population of students without university residence spaces becomes so high and the parents of said students become so desperate to find their darlings a place to live that rents shoot way way up and property maintenance goes way, way down. Any units that are clean, functional, on a good street and have more than 900 sqft end up being marketed as ‘executive’ units and the price doubles.

The Kingston rental market is a painful joke if you’re an adult with money but not enough money to fork over $2300 + utilities/heat/water. Oh, and if you have a pet, forget it completely.

I currently live in a duplexed home (illegal) and it’s half way decent but there really isn’t enough room or sound insulation to justify the rent. Still, I got my money out of my house and will buy again when the market really starts to turn. Probably *not* in this city.

#191 Living in AB on 01.11.12 at 2:29 pm

I been reading this blog for over a year and lovin it. After today’s post it kinda feels like we’re in the eye of the storm. Question is once we get back into it how bad will it really be. I live in Edmonton and I gave myself a worst case scenario of a 20% correction (based on historical prices).

#192 Devil's Advocate on 01.11.12 at 2:39 pm

#178Form Man on 01.11.12 at 12:53 pm
171 DA

The published OMREB data and your panicked, frightened, responses speak for themselves. It must really hurt to be consistently wrong, but we all salute your stubborness and denial…………

Ever hear of the 80/20 rule Form Man?

“Stubborn”? – yes although I tend to think of it as tenaciously committed to enlightening they who have been provided only one side of the story.

“Denial”? – not so much as there was a time I was like you and most everyone else on this blog. That was three years ago. What caused me to change my mind? Well for starters keeping it “open” to other possibilities. A mind is a powerful thing. Ideas become reality more than you know. As a builder you should understand this or do you just show up on a jobsite with a bunch of wood and start building whatever.

“Wrong”? – How so? I deal with facts here and now. I don’t forecast the future so I can not be proven right or wrong. I do not have a crystal ball. If pressed with the question “Will the market go up or down this year?” my answer is yes, it will go up or down this year. The fact is the past 3 and 4 years have provided generally consistent prices and volumes commensurate with pre-boom levels. You can take THAT to the bank. As for future forecast – yours is as good as mine.

Back to that 80/20 rule… which side of it are you on? Seriously Form Man, how’s that working out for you? I will tell you that I could be doing better but I am certainly getting more than my fair share as I work hard to keep a positive attitude and open mind for all the opportunity doing so brings my way. And really Form Man, seriously Dude, you must admit having your head stuck up your ass does tend to preclude seeing those opportunities that abound.

#193 DonDWest on 01.11.12 at 2:39 pm

#176 sam.i.am

Sam, not really, people just don’t rent in Halifax. It’s not culturally accepted unless you’re in university/college, working that first job, or on welfare.

It’s not that there isn’t a rental market per say; it’s merely flooded with International students (we have 6 major universities who now recruit international students instead of local kids). The international students can come from wealthy parents in Asia and central Europe. This drives up rents.

SFH’s in Halifax go for $1500 to $2500 rent a month. Groups of students rent out these homes. In most cases it’s cheaper to buy if you have a sizable downpayment. Very rarely do SFH’s rent in Halifax; and when they do it’s a hefty price.

Halifax has serious problems with urban sprawl, transportation, and having approriate housing to meet the various demographics of it’s population. It’s not that we don’t have enough housing. We have excess supply and there’s abandoned buildings everywhere. It’s just that we have too many tiny apartments and retiree McMansions; and not enough in between.

#194 bill on 01.11.12 at 3:17 pm

thanks for the oil link junius

,dd on 01.11.12 at 12:15 am

”just heard Carny is keeping interest rate on hold until 2013. Strike one with your 2012 predictions.”

could you provide a link or is it just the voices in your head?
thanks!

#195 Jeff on 01.11.12 at 3:27 pm

CJAD radio interview with Garth regarding Montreal’s condo market:

http://www.cjad.com/Podcasts/Episodes.aspx?PID=2389

#196 new_era on 01.11.12 at 3:29 pm

Just like Goldman Sachs

They were betting on a housing crisis before the US housing crisis begun.

The banks knew housing is in deep deep doo doo. And I’m sure the upper management has been preparing to rake in the $$$ from the coming crisis leaving the sheeple to be slaughtered by the wolves.

Just a month ago they said no crisis Canada is safe and stable with a modest gain of 2 percent

Several weeks later, expect a 10 to 15% correction.

Now they are saying 25%.

What they know they will not tell the Sheeple until they feel the right time has come. My take on this is they are starting to move the Sheeple in the direction towards the slaughter houses.

For the Sheeple, if you truly think the Chinese are soooo
“ME So Horny” for your land and houses, then there shouldn’t be any worries. Even if the government is about to start cut back of jobs and programs.

#197 Guy1 on 01.11.12 at 3:32 pm

Why is it that yesterday we get one version of the truth in an article about the housing correction, but today we get another (in the exact same title of article with the same author). It’s almost as if someone is being told to censor the kind of things that you’ve been discussing:

http://ca.news.yahoo.com/overbuilt-condo-markets-vancouver-toronto-risk-says-rbc-175002380.html

http://ca.finance.yahoo.com/news/Overbuilt-condo-markets-capress-3758301982.html?x=0

#198 Guy1 on 01.11.12 at 3:35 pm

Oh, and I tried to write in the comment section of the new yahoo article pointing out the discrepancy, and yahoo removed my comments.

#199 disciple on 01.11.12 at 4:05 pm

Nigeria. You will be hearing more and more about this next target of Goldman Sachs and Big Oil. Using the fake religious division as an excuse for AFRICOM to fight the silent Chinese invasion in this country. Go back and read my post on Natural Gas, and compare with today’s headline on the same. Artificial inflation of energy prices. Choose stocks and convertible debentures that the talking heads in the media are not talking about. Analyst predictions are virtually always wrong, after all, they have to sell their particular markets or securities, and of course, they know they are being watched by the real rulers. Is there a member of the REIT or FIRE executive class on this blog, perhaps lurking, that would please throw us a biscuit? I can read between the lines, so let’s play that game, shall we? Come on, I know you’re bored as hell playing with other peoples’ money like toy trinkets, why not give Garth’s blog a break and let us have a clue?

#200 disciple on 01.11.12 at 4:15 pm

Aaron Russo murdered. Who is Aaron Russo? Who cares?Just watch the video below. This is very old news, but I sometimes forget that there are multitudes out there who need to catch up to me. So, I’ll slow down for a bit…

“Catch me if you can” – (Socrates before being forced to drink poison hemlock)

http://www.youtube.com/watch?v=ZccY7_Q8zCs&feature=youtu.be

#201 GTA housing crash on 01.11.12 at 4:43 pm

The GTA housing crash has started. From the outside it will crumble inward and the effects are already seen. People are worried about cuts to their pay as Canadians can not compete with American wages. Americans are working for 20-40% less then what used to make and much less then what we Canadians make. With the Average American home costing 50% less has put Canadians at a huge disadvantage. The Americans are start to have let their housing market correct to level where Americans can work for less and still afford a home. Do you understand jobs will continue going back to the US? How will jobless Canadians or Canadians earning lower wages afford housing that costs TWICE as much as the US? Like Garth has pointed out the numbers do not make sense and prices will CRASH back down to reality.

#202 ab on 01.11.12 at 4:52 pm

@#180 Kilby re your post @ #111 ab.

“Take the offer! We had our house appraised (not by realtor) at $619,000. Listed at $597,000. Sold for $497,000 after 6 months. 1/2 acre in Okanagan town, lake view. There were 15 lake view homes for sale at the time (Jan. 2011) and I think most of them are still for sale, following the market down. A dollar in the hand is worth more than a house in a flat market.”

I think I’ll take the offer.

#203 Van guy blazin kush on 01.11.12 at 5:01 pm

http://t.co/vPpZ46Hs

This is A screenshot of a small portion of Richmond listings. Each red balloon indicates a listing. Scary eh? I’ll post this again next week as the surge of listings continue

#204 Tom on 01.11.12 at 5:07 pm

I live eighty miles east of Calgary where the now glut of houses that have become w just huge overpriced boat anchors around the necks of those punchers who were lured stampeded or rushed like lemmings into the overheated and overpriced trap of low interest loans and thirty-five year mortgages.The same obvious disaster and problem of a meltdown in the housing market is already well underway and spreading and even where I live with a population of only 1.300 there is nearly forty homes on the local market that are way over priced and mortgage holders are carrying huge debt loads that most have not had a single offer of to purchase for months. Sadly the vary few that hold clear titles to their homes are older persons that now want to finally cash in on their lifetime investment in a piece of paid off property now will also be badly disappointed and be forced see olly an extremely low return for their years of hard work and saving which will now simply evaporate in the firestorm of the real-estate meltdown

#205 morry on 01.11.12 at 5:41 pm

#152 poco
Show us where prices have fallen! Coq. area is still climbing. Burke Mountain is full steam ahead. Ditto Westwood Plateau. Look at the new developments in the Coq area for the past two years: TH have gained 20 -30K .. .you may “wish” it was otherwise, but reality is on our side.

You talk but have no data. We have what we can see.

We are up as of today, and have levelled off. Not a bad thing. But good timing none the less for my son.

and the evergreen line will cause a nice pop when finished ;-)
“Construction of the Evergreen Line Rapid Transit Project will start in January 2012 with completion scheduled for summer 2016”

PS HPI index up: http://bit.ly/AynPZJ and then stabilizing until the next cycle.

PPS I actually enjoy seeing your heart rates climb ;-) If Wishes were Horses and all that …

#206 morry on 01.11.12 at 5:44 pm

@Van guy blazon kush
“This TH must be 20 + years old too.”

wrong jungle breath.

#207 Van guy blazin kush on 01.11.12 at 5:45 pm

Great Audio from cfax Victoria with Garth on Monday. Starts around the 5 min mark.

http://t.co/vPpZ46Hs

#208 astowar on 01.11.12 at 6:07 pm

Does anyone get the feeling that the Canadian housing market is a bit like a beauty pageant? All smoke and cracked mirrors poorly hiding a series of really, really bad decisions?

A lot of people seem to have been sipping the “special juice” that is (was?) the promise of a neverending rise in real estate values.

The internet speaks:

http://www.youtube.com/watch?v=lTA6KDszz_A&sns=em

#209 City Slicker on 01.11.12 at 6:10 pm

Looks like heavy insider selling by Gord Nixon:

http://canadianinsider.com/node/7?menu_tickersearch=Royal+Bank+of+Canada+%7C+RY

Wow rich dude, sold $12 million + on this batch. We’ll see how many more he sells.
Something big could be coming down the pipe and he knows it.
City Slicker does it again!

#210 City Slicker on 01.11.12 at 6:13 pm

And more insider selling by RBC yesterday, doesn’t say who, but could be Nixon again:

http://www.tmxmoney.com/HttpController?GetPage=SearchInsiderTrade&Language=en&Submit=Submit&QuerySymbol=ry&x=38&y=12

Another whopping $14 million plus!

-City Slicker

#211 City Slicker on 01.11.12 at 6:17 pm

#202 GTA housing crash on 01.11.12 at 4:43 pm The GTA housing crash has started. From the outside it will crumble inward and the effects are already seen. People are worried about cuts to their pay as Canadians can not compete with American wages. Americans are working for 20-40% less then what used to make and much less then what we Canadians make. With the Average American home costing 50% less has put Canadians at a huge disadvantage. The Americans are start to have let their housing market correct to level where Americans can work for less and still afford a home. Do you understand jobs will continue going back to the US? How will jobless Canadians or Canadians earning lower wages afford housing that costs TWICE as much as the US? Like Garth has pointed out the numbers do not make sense and prices will CRASH back down to reality.
———————————————————-
This is a great point. Lots of Canadians shopping south for real estate discounts, but who will help support us when the bomb hits here.

#212 Form Man on 01.11.12 at 6:23 pm

#189 debtfree

I am not the gentleman from Kamloops whom you refer to, but I am quite familiar with his various disastrous real estate endeavors. I think DA may be his realtor………..

#193 DA

I am well aware of the 80/20 rule, and always strive to hire staff that represent the 20%.
I have found that those who are in the 20% feel no need to brag about how hard they work or how good they are. It is the 80% who feel insecure, and are continuously crowing about themselves and childishly attacking others …………….

#213 Van guy blazin kush on 01.11.12 at 6:36 pm

Morry,

Your link posted is Jay Banks site. That guy is a realtor. What is he suppose to post? It’s like a car salesman telling you he’s giving you a car at cost. Or a Futureshop salesman that says he’s losing money in this deal. You’re a easy victim to being ripped off. You would believe that guy but not this site. Good luck buddy!

#214 jess on 01.11.12 at 6:41 pm

.#202 GTA housing crash

Insourcing
..as the White House will soon announce incentives for bringing employment to the country. ”
repatriation $
——-
Why is the British Virgin Islands one of the largest investors in China?

#215 Devil's Advocate on 01.11.12 at 6:41 pm

#186Okanagan Renter on 01.11.12 at 1:57 pm

I will not publically comment on a specific property that is currently listed on the MLS by another REALTOR®.

What I will tell you is Kelowna South, that quadrant of Kelowna in which this particular property is situated, is one of the areas of the city which has seen prices hold better than most. In many cases property values here have risen due to the continuing strong demand for the area by an aging demographic that tends to like what this close in established, funky, heritage neighbourhood next to the lake has to offer.

#216 I used to be a real estate association president like you... on 01.11.12 at 6:48 pm

… then I took an arrow to the knee.

#217 sam.i.am on 01.11.12 at 6:54 pm

Don D in case you missed it, my initial response was supposed to be sarcastic :)

I grew up in the Halifax area and spent many years in student slums. I know the area well and still travel there often.

Housing is way overpriced in hrm relative to employment prospects.

The International student thing has always been going on. One truly good deal for Canadians is the University system. It isn’t surprising the international student population is large. Costs are less than half a comparable US school.

Food and other necessities do seem to be expensive.

The cities are growing at the expense of the smaller communities who are losing their young people. The same thing is happening in Newfoundland except maybe worse. Small communities full of old people.

I have mentioned here before that I was looking to move back to NS, but not till the current cycle runs its course. Till that time, it is a great place to visit.

BTW, what’s up with all the gun violence of late?

#218 JRoss on 01.11.12 at 7:05 pm

DA,

“The fact is the past 3 and 4 years have provided generally consistent prices and volumes commensurate with pre-boom levels.”

Repeating this ad infintitum does not make it true.

#219 Kilby on 01.11.12 at 7:16 pm

#190 grantmi.

1991, $130,000

#220 Montrealer on 01.11.12 at 7:17 pm

#137 pbrasseur (and Garth)

You can hear the podcast from Garth’s interview from this morning on CJAD radio Montreal at http://www.cjad.com/Podcasts/index.aspx

click on The Tommy Schnurmacher Show

#221 'Greg' from Calgary on 01.11.12 at 7:18 pm

Anyone else notice all the ‘warnings’ coming out over the last couple days? Any reason why the catalist was this week? Seemed like a strange and quiet week to notice the coming doom.

#222 John Prine on 01.11.12 at 7:22 pm

#209, van guy blazin kush. Could you check the CFAX link? I just got the Richman sales map??

#223 John Reid on 01.11.12 at 7:29 pm

Cabinet Ministers with no related work experience can get pensions of $175,000 yearly plus benefits from our tax dollars. When the public becomes disabled and needs some of their own tax dollars back, they are given $16 daily (truth) with no benefits. This is called Managing the Affairs of Public. They also manage the economy, mortgage rates, and home values.Good news is that they are trying to reduce MP pensions.

That is 100% false. I am an ex-Cabinet Minister. My pension (which I donate) is $26,000. — Garth

#224 Montrealer on 01.11.12 at 7:30 pm

and it’s worth listening to the CJAD show, the lady telling people to buy a loosing cashflow condo in order to generate losses and get tax refunds gets a great answer back hehe.

#225 Ben on 01.11.12 at 7:32 pm

#205 bob’s my uncle on 01.11.12 at 5:02 pm

Still drunk on the kool-aid

#226 Form Man on 01.11.12 at 7:33 pm

#216 DA

you mean the area where Sopa Square is being built ? several developments in that area have, or are going, into receivership. Odd, considering your assertion that prices have risen amid robust demand……….. perhaps your delusion is now complete………
fear not DA; if you run to westernman, he will set aside his inexplicable rage, dry your tears, and embrace you as best he can in his fascist, separatist way……..

#227 TurnerNation on 01.11.12 at 7:35 pm

Err, as “Mr Lahey” says: The sh-t hawks are coming Randy”. And “A sh-t leapord never changes his spots”

…………..
DJ UPDATE: Fed’s Plosser: Economy May Drive Fed To Hike Before Mid-2013

–Plosser: Economy may drive Fed to hike before mid-2013
–Plosser: Sees growth at ‘moderate pace’, GDP at 3% in 2012, 2013
–Plosser: Fed must proceed with caution given its stimulus moves

(Updates with remarks during Q&A in fifth, thirteenth and fourteenth paragraphs)

By Michael S. Derby and Cynthia Lin
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–The Federal Reserve may have to tighten monetary policy before many now expect, a central bank official said in a speech Wednesday that also said the U.S. economy will do better in 2012 amid improved labor markets.
“I believe economic conditions may require the Fed to raise rates before mid-2013,” Federal Reserve Bank of Philadelphia President Charles Plosser said in Rochester, N.Y.

#228 Nostradamus Le Mad Vlad on 01.11.12 at 7:35 pm


Nippy enough 2day that I almost froze my nuts off. Yes, it’s brass monkey weather again! Still, better than the 18 foot flurry in north Alaska yesterday. Eskimos in Europe?
*
THOUGHT FOR THE DAY! — “Liberties are not given; they are taken.” — Aldous Huxley
*
Civil War on Wall St. Elites are infighting. “Well, well… here’s your Shock & Awe”; Financial War on Terror First para. says a lot; Oil When one is broke, as Colorado is, any income is better than none, such as Idaho; Why 308,127,404 American are about to get shafted; RBS and Lloyds (publically owned) use taxpayer cash to employ lobbyists; JPM and Soros MF Global is the connection; Criminal Bankruptcy admitted. One guess;
*
1:34 clip “There are more FEMALE serving soliders in China than the ENTIRE US population. Get your head around that? Okay, now lets add on the Russians, Iranians and Pakistan. Is war with Iran really worth it?” (wrh.com), and China “Translation: “Screw you, screw the dollar, and screw your stupid war!” wrh.com; SOPA WordPress comes out against it; Indian Ocean Phobos-Grunt may / may not land in it; Occupy the Rose Bowl parade; Obomba in Wonderland “The simple and austere life is for the slaves!” wrh.com; 8:27 clip CIA issued fake passports for 9-11 hijackers.

#200 disciple — “Nigeria.” Correct, and further — From Iraq to South Sudan Butchers (Obomba) can never have enough blood; Obomba Re-Election = Texas secession? Karma’s a bitch What goes around comes around again; Iran Evolving quicker than the west; Subliminal Advertising Unplug ourselves; Iran Scientist US-backed terror group responsible. “All war is based on deception.” — Sun Tsu.

#229 Devil's Advocate on 01.11.12 at 7:44 pm

#220JRoss on 01.11.12 at 7:05 pm
DA,

“The fact is the past 3 and 4 years have provided generally consistent prices and volumes commensurate with pre-boom levels.”

Repeating this ad infintitum does not make it true.

Nor does repeatedly denying it make it false.

But thank you for bringing it to my attention as I, heaven forbid, I was indeed in error. While the FACT IS the past 4 years have provided unit sales volumes commensurate with those pre-boom levels, prices doubled and then have capitulated but a mere 15% since the peak of the bubble. That should be telling you something – “normal” volumes at such high prices… go figure eh.

#230 Smoking Man on 01.11.12 at 7:48 pm

Who wants to make a million bucks

Diamond in the rough

http://www.realtor.ca/propertyDetails.aspx?propertyId=11439351&PidKey=896376964

lot is 92 x 128 price 380k

you can build 3 detached or 4 town homes today you can get about 500 if town home or 750ish detached

even if there is a re correction of 15% you will still make a million its that easy

why am I not doing it. im f-en lazy and already loaded

read the text owner will not sell to anyone at TD lmao

#231 Onemorething on 01.11.12 at 8:03 pm

what I can tell you is any Realtor who made money in the fast rising Okanagan market over the last 10 years has their work cut out for them for the next 10!

I’ve got my eye on a 1.2M sitting now a 999K. It’s gonna go to 699K! If it doesnt I have 3 back up properties that likely will!

Oh yeah, I will buy them privately with a standard offer via my lawyer. Private sales are coming big time as those who loved realtors on the way up, will despise them on the way down.

RE fees at 1% will be to high! My Lawyer can do it for under 1K!

#232 Devil's Advocate on 01.11.12 at 8:08 pm

#214Form Man on 01.11.12 at 6:23 pm

My childishly attacking others? Come on now Form Man if that is not the pot calling the kettle black I don’t know what is.

On the 80/20 rule… I’d suggest to you and all the other pups and poodles that generally speaking very few of the 20 frequent this “pathetic” blog. In other words Form Man… you too being one who frequents this “pathetic” blog are more likely one of the 80% than the 20. Furthermore, no one has surpassed you in your boastful claim of personal fame and fortune touting your sailboat and $2mil plus lakefront property – if indeed they really exist at all.

Me? Yes I too do frequent this blog.

My needs are simple and thereby I must admit to having more than I need. So I need not nor want for my work to qualifying me for membership in that 20% club – if you are measuring based on quantity that is, for my business is built on quality not quantity and quality is its own reward. Suffice it to say, I get enough to keep me happy but not so much that I can’t keep my clients so. Call that being a braggart if you will.

#233 pbrasseur on 01.11.12 at 8:10 pm

@Montrealer #222

Thanks :)

#234 Sitting on the Sidelines on 01.11.12 at 8:24 pm

With respect to your musings about CEO’s of the Big 5 banks owning real estate, I can tell you (from my experience of being the private Admin Assistant to the SVP of one of the banks) that the banks generally carry an interest-free mortgage for the top executives with no down payment necessary. The banks did tell the executives where they had to live (in the case I have knowledge of, Shaughnessy not West Vancouver – too nouveau riche) but all in all a sweet deal for the executives involved. And yes, the individuals involved do get to benefit from price increases when it’s time to sell.

#235 Tony on 01.11.12 at 8:42 pm

Re: #4 shane on 01.10.12 at 6:16 pm

More listings (not many more though) but prices haven’t fallen at all. They still are selling almost as fast as last year. Anything near Bayview and the 16th still sells in a day or two. Any new project sells out in a day or two still with camp outs to buy. The rental vacancy rate is about zero.

Without numbers your comments are hollow. — Garth

#236 poco on 01.11.12 at 8:52 pm

th#207morry on 01.11.12 at 5:41 pm
#152 poco
Show us where prices have fallen! Coq. area is still climbing. Burke Mountain is full steam ahead. Ditto Westwood Plateau. Look at the new developments in the Coq area for the past two years: TH have gained 20 -30K .. .you may “wish” it was otherwise, but reality is on our side.
You talk but have no data. We have what we can see.
We are up as of today, and have levelled off. Not a bad thing. But good timing none the less for my son.
and the evergreen line will cause a nice pop when finished ;-)
“Construction of the Evergreen Line Rapid Transit Project will start in January 2012 with completion scheduled for summer 2016″
PS HPI index up: http://bit.ly/AynPZJ and then stabilizing until the next cycle.
PPS I actually enjoy seeing your heart rates climb ;-) If Wishes were Horses and all that …
____________________________________________
sorry again but Coq. is no different than many other areas that have had substantial price declines–including Burke Mtn and Westwood Plateau
the new mega houses up near Burke Mtn were consistantly selling for asking price but have now begun to drop their prices—open your eyes and watch

e-mail i got just last week—V924013–Hollybrook -(Burke Mtn)-listed May 2011–989.9k—just dropped to 888k—
or go a little west to Pipeline Rd in Westwood area–property was listed for1.19m just sold for 920k
1423 Pipeline—cherry picking –sorry–but no–everythings coming off– now watch Burke Mtn area slowly melt
as far as the TH up in that area– would your son want to raise a family in these
http://www.realtor.ca/propertyDetails.aspx?propertyId=11357883&PidKey=-1773845647

ya 450k for 1200 sqft –what a joke !!!–what gets me with these new townhomes “think tall not small”–is there’s no bathroom on the main living floor—you have to run up stairs to go !!! i’m getting too old for that—

as for Westwood Plateau area it’s been dropping for a long while–here’s a townhouse–if it sells for this the owner will lose money from his purchase in feb of 2009
http://www.realtor.ca/propertyDetails.aspx?propertyId=11002393&PidKey=309034172
i’ve got lots more–tons of condos all over tri cities are underwater–sitting empty with no buyers

morry–do some research –find a couple of places –especially the empty ones—there are lots all over –get the listing agents name –give them a call–see what develops—you know bulsh*t the bullsh*ter
as you won’t let us know the area you bought –got to call you as one very afraid purchaser of a deflating asset trying to pump himself up–it isn’t this blog you’re trying to convince because 99.9% know where we’re headed

as far as data is concerned–i get everything i need –new listings– price changes–sales –haven’t even finished going thru my e-mails from last week—you should try it

Morry go back a few posts and find the condos i listed on 1185 High St Coq—3 of them are underwater to the tune of about 165k–got all that from a realtor with the paper work
ya if you hold on you’ll go down with the rest of the owners and in time you’ll recover –probably–but how long is this going to take

PS: start construction in Jan 2012–they still haven’t bought up all the property where this line is suppose to go—as i said before you’re lucky if it’s done in 10years –when property values might be on the way back up

#237 pathrik M on 01.11.12 at 9:03 pm

The last federal election was called right before the bubble popped. What remarkable and coincidental timing.

The Tories were elected with a majority, in great part, due to their gerrymandering of the housing market. We know who the losers will be from this sorry episode. However its also clear the Harper government has been the undisputed winner thus far.

#238 maxx on 01.11.12 at 9:05 pm

“I’ll bet no bank CEO has more than 30% of their net worth in real estate. Do you?”

Bullseye, Garth. I’ll take those odds as well. Otherwise, they wouldn’t be able to afford the luxury of attending business luncheons and pontificating on the high cost of (paid for ) social programs and how governments must cut costs….

ie.: Ed Clark, President and Chief Executive Officer,
TD Bank Group, October 19, 2011.

#239 TurnerNation on 01.11.12 at 9:14 pm

This economic model is coming to Canada. Look south…waaaay south to USA and even South America to see how the corporations have taken over. Endless hardline regimes slowly sap people.

Slavery, the Prison/Industrial Complex, and American Hypocrisy – Fri, 08/24/2007
http://www.greencommons.org/node/770

…In today’s America, drug laws have become the new Jim Crow laws, the prison/industrial complex has become the new plantation, and the warden has become the new overseer. America’s newest slaves aren’t picking cotton. They’re assembling computers, making women’s lingerie, booking airline flights over the phone, telemarketing for major corporations, and doing all kinds of tasks that free Americans used to be employed at doing. What appeared to be a normal plant closing by U.S. Technologies when it sold its electronics plant in Austin, was actually the company relocating its operations to a nearby Austin prison. One hundred and fifty “free” employees lost their jobs to the new slaves.

If you book a flight on TWA over the phone, a prisoner may be taking your order. If you buy yourself or your loved one something from Victoria Secret, it may have come from a prison in South Carolina. Corporations like Chevron, Boeing, IBM, Motorola, Honda, Toys R Us, Compaq, Dell, Texas Instruments, Honeywell, Hewett-Packard, Microsoft, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, and AT&T are a few of the ever-growing list of companies that are, or have at one time, used this kind of slave labor. Federal prisons operate under the trade name Unicor and use their prisoners to make everything from lawn furniture to congressional desks. Federal safety and health standards do not protect prison labor, nor do the National Labor Relations Board policies nor does the minimum wage apply. Corporations that use slave labor don’t pay overtime, sick days, pensions, and don’t have to deal with unions for this work. Prison/slaves are paid about 25 cents an hour.

#240 Stevenson on 01.11.12 at 9:23 pm

You guys are unbelievable. When the articles don’t fit your arguments you call the banks and other rating companies blowing smoke. When they start to lean on the other side you think they are spot on. You can’t be more selective. It’s called confirmation bias.

I confirm you are biased. — Garth

#241 Realtors in a Panic on 01.11.12 at 9:29 pm

#232 Smoking Man
That’s a power of sale. The housing crash is WELL underway

also INTEREST RATES ARE GOING MUCH HIGHER! Realtors have much to worry about in the current Canadian HOUSING CRASH!

Canadian governments brace for higher debt costs
http://www.theglobeandmail.com/globe-investor/canadian-governments-brace-for-higher-debt-costs/article2299505/

#242 Devore on 01.11.12 at 9:37 pm

#187 Van guy blazin kush

This one sold in May 2011 for 1.368 mil.

This one was particularly poorly timed, as mid spring, shortly after Chinese New Year (ie after Fukushima), is when HAM left Richmond, and volume and prices stalled noticeably. Classic case of a johnny-come-lately jumping in with both feet, about to receive a schooling in pump & dump market manipulation. If you can’t see the sucker at the table, you’re it.

#243 Smoking Man on 01.11.12 at 9:48 pm

#241 TurnerNation on 01.11.12 at 9:14 pm

Perhaps thats why Hosni Harpo to build more jails

#244 Tony on 01.11.12 at 9:54 pm

Re: #131 bigrider on 01.11.12 at 8:39 am

This web page says the opposite. Gee i wonder who runs this web page?

http://www.e-wavecharts.com/

Carrigan used to pick well decades ago but you better check his forecasts in the Toronto Star the past 5 years or so. Since the future is now you’ll see his percentages are far below the 50/50 mark of being right.

Do what the web page says get short and get wealthy.

#245 jess on 01.11.12 at 10:01 pm

New federal immigration rules exploited by fraudsters: documents
Federal anti-fraud unit finds 22 per cent of Chinese applicants misrepresented credentials
By Peter O’Neil, Vancouver Sun

Read more: http://www.vancouversun.com/business/federal+immigration+rules+exploited+fraudsters+documents/5969911/story.html#ixzz1jCmvse4x

=========

A woman bank manager who had stolen crores and was hiding in Canada for over a decade has been arrested and brought to India.

Preeti Vijar Sajwani, 44, is wanted by the CBI in Gandhinagar in connection with fraud of Rs 2.5 crore from an Indian Overseas Bank branch where she was the deputy bank manager. This was in 2001.

Sajawani fled to Canada soon after the CBI began probe. The Canadian authorities recently flushed her out of hiding following a red corner notice in 2006. She was deported to India on Wednesday.
Canada deports woman con manager to India

=============
It did end well for this cowboy!
19M mortgage fraud

SACRAMENTO, California — A Northern California man who was caught hiding $70,000 in his cowboy boots mortgage fraud scheme.http://www.sacbee.com/2012/01/10/4177879/california-suspect-guilty-in-19m.html

#246 Westernman on 01.11.12 at 10:30 pm

Turner nation @ # 241,
Awwwwwwww, those poor murders, rapists, child molesters and so on, how unfair of them to have to do something for society instead of destroying it…
Can’t we have Amnesty International or someone get them out of prison and back on the streets robbing, murdering and raping?
I’m sure they are all innocent choirboys just being persecuted by the man…

#247 Vic in Victoria on 01.11.12 at 10:59 pm

Hi Garth,

I thought I’d pass along our news from Victoria. We just sold our bungalow after being on the market since August. We lost a bit, but we’re relieved that we have been able to sell. I see many homes now on craigslist, that were up for sale recently; we are one of the lucky ones. We’re looking forward to renting and having some time back to enjoy our children, rather than spending our weekends maintaining our home. Thanks for all the info.

#248 pjwlk on 01.11.12 at 11:24 pm

#38 TheFirstRick -> “As a matter of fact, I can *prove* to you I was the one who FIRST used the word Realturd online.”
~~~~~~~~~~~~~~~~~~~~~
I wouldn’t have thought that would be something a person would be proud of.

#249 Okanagan Renter on 01.11.12 at 11:40 pm

#217 Devil’s Advocate on 01.11.12 at 6:41 pm
#186Okanagan Renter on 01.11.12 at 1:57 pm

I will not publically comment on a specific property that is currently listed on the MLS by another REALTOR®.

What I will tell you is Kelowna South, that quadrant of Kelowna in which this particular property is situated, is one of the areas of the city which has seen prices hold better than most. In many cases property values here have risen due to the continuing strong demand for the area by an aging demographic that tends to like what this close in established, funky, heritage neighbourhood next to the lake has to offer.

DA, I don’t dispute that Kelowna South is a desirable place. In fact, once the shizerstorm is over in a few or several years (I can wait), I may even pick up a bung myself somewhere in the area. But this property in particular is not exactly “next to the lake”. It’s next to the dope fiend-infested building I mentioned in my post.

Also, I lot of the older properties in the quadrant are tear-downs waiting to happen. I even had a friend suggest with a straight face that I buy one of these shacks, knock it over and build a new money pit. By some stroke of divine intervention I began to research the web to see if that was a wise move. And that’s when I found this blog. The rest is history. As for my friend, he’s stopped insisting that the Kelowna market has “hit bottom”. Geez, maybe he’s on to something?

#250 Aussie Roy on 01.12.12 at 6:45 am

Aussie Update

The Housing Industry Association (HIA) Economics Group has released a note on where it sees dwelling prices heading for 2012.

http://www.macrobusiness.com.au/2012/01/hia-dispels-the-doom/

It appears that the Australian banking system continues to pay the price for the European crisis and its reliance on foreign funding. As I mentioned last week CBA paid a high price to issue covered bonds in the European market due to the costs of swapping Euros back to AUD.

http://www.macrobusiness.com.au/2012/01/anz-pays-a-high-price-as-well/

Philip Lowe, who is set to become the second most senior official at the Reserve Bank of Australia when he becomes deputy governor next month, appears in little doubt that central banks have to be more vigilant about asset price growth.

Of course no problems here in Australia because we don’t have a bubble – LOL

http://afr.com/p/national/top_of_pops_in_bubble_brouhaha_pil1zGaAUotPW0vRoUe8WN

Don’t we keep being told we are saving?.

Australian credit card debt has struck a new record high of $50 billion, ballooning by almost a third in the past five years.

New figures from the Reserve Bank, published today, show outstanding credit card debt topped $50 billion for the first time in November, with $36.3 billion of the total accruing interest.

http://www.theage.com.au/business/credit-card-debt-swells-to-record-50-billion-20120112-1pwqe.html#ixzz1jEuFXubM

Skyscrapers Foretell Financial Collapse: Look Out China, India

http://au.ibtimes.com/articles/280336/20120111/skyscrapers-financial-collapse-barclay-china-india.htm?utm_source=Global+Markets+Daily&utm_campaign=904b08e5b1-Global_Markets_Daily_24_21_2011&utm_medium=email

The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a “cataclysmic” collapse of the euro, David Riley, the head of sovereign ratings for Fitch, has warned.

http://m.theage.com.au/business/world-business/fitch-warns-of-cataclysmic-euro-collapse-20120112-1pw7s.html

Once per quarter investment professionals from across PIMCO’s global offices gather in Newport Beach for our Economic Forum. These sessions have been the foundation of PIMCO’s investment process for years; we debate and update our short-term and long-term views for the global economy, and, from that, for individual asset classes, such as government bonds, corporate bonds, mortgages and stocks. Last month we gathered for our December Forum and the topic that dominated the discussion, as it has in recent quarters, was the fate of the euro.

http://www.hemscott.com/news/comment-archive/item.do?id=152431

#251 Breakdown on 01.12.12 at 4:31 pm

Real Estate as a percentage of the economy.

In the 80s. My parents purchased a house valued at approx $50K (conservative high number), around the same time, the price of a VCR finally dipped below $1000 (WOW!!!).

That same house today (30 years later) has a value of approx: $250K. The VCR or today’s modern equivalent is NOT worth $5000, in fact it’s no where close!!

My point here isn’t that the house value should be at 40 times the value of a DVD player (although it would be very comfy for new home owners if it was), it’s that with Canadians and Americans buying consumer goods and the like from low-cost geographies, you inevitably end up with a much higher proportion of your economy being based on those industries (housing starts, highways), that simply cannot be imported (no one has determined a way to import a reasonable-sized detached home from Mexico or China yet.

#252 morry on 01.12.12 at 5:59 pm

@Van guy blazon kush

yes. but how can _you_ with the facts!

#253 Bank of Montreal Starts Mortgage Rate War | Iggy Ann on 01.14.12 at 3:03 am

[…] While some say this is great news, others say this is setting up Canadians for a sub-prime-like disaster if interest rates climb in the future  – mixed with an inevitable downturn. […]